The Dhaka Stock Exchange (DSE) yesterday suspended the trading of Padma Oil Company Ltd on charges of illegally revising dividends earlier declared by the state-owned fuel company.
Padma Oil announced a 100 percent cash dividend in December last year but split it into a 50 percent cash dividend and a 50 stock dividend months later.
“The Board of Directors of the company [Padma Oil] changed recommended dividends prior to holding an AGM which is tantamount to contravening an SEC notification,” the premier bourse said in a Web posting.
The DSE had earlier sought opinions from the Securities and Exchange Commission about the trading suspension of Padma Oil saying that revised dividends could impact the market.
In reply, the SEC on Tuesday said the DSE can suspend the trading of Padma Oil, as the revision of announced dividends by the company was not a legal move.
In December last year, Padma Oil announced 100 percent cash dividends but did not inform the SEC or the DSE about its board meeting for the dividend recommendation, although it was a legal requirement.
In January, a Padma Oil shareholder filed a writ petition with the High Court, which stayed the dividend for three months. The petitioner alleged that the company violated the listing rules by recommending a 100 percent cash dividend.
In line with the securities rule, a listed company must notify regulators and bourses before holding a board meeting for a dividend declaration.
On March 20, Padma Oil at a board meeting recommended a 50 percent cash dividend and a 50 stock dividend revising the previous declaration.
Padma Oil last traded on the secondary market on Tuesday, with each share closing at Tk 733.20 on the DSE.
http://www.thedailystar.net/newDesign/news-details.php?nid=179792
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