60 listed cos violate financial disclosure rules

Mostafizur Rahman | Published at 10:08pm on February 14, 2020

Around 60 listed companies did not comply with securities rules related to financial disclosure as the companies did not provide proper reasons for significant changes in their earnings in the second quarter ended in December last year compared with that in the same period of the previous year, BSEC officials said.

According to the notification (financial reporting and disclosure) issued by the Bangladesh Securities and Exchange Commission on June 20, 2018, the listed company must, within one month of the end of the second quarter of the financial year, submit quarterly financial statements to the commission and the stock exchange.

‘And in case of significant deviation in any parameter between the quarterly periods, the company shall provide reasons,’ it said.

Of the 217 companies whose financial year ended in June 30, 13 companies failed to declare December-end quarterly reports on stipulated time violating the securities rules.

Of the 204 companies which declared quarterly reports for the October-December, 2019 period, around 100 companies provided reasons for the change in their earnings compared with that in the same period of the previous year.

According to the DSE web site, 87 companies witnessed significant deviation in earnings in October-December against the same period in the previous year.

Companies have to provide quarterly reports or any price sensitive information (PSI) to the DSE and the DSE posts it on its web site.

Profits of Aftab Auto plunged by 63.8 per cent in the second quarter against the period in the previous year, but the company did not disclose the reason for the significant profit deviation.

Maksons Spinning Mills and Metro Spinning saw profits against losses in the same period in the previous year. But, they also did not provide any reason for the changes.Profits of

Paramount  Textile soared by 146 per cent and Apex Foot by 95 per cent in July-December, 2019 compared with that in the same period of the previous year.

Profits of Intech plunged by 94 per cent, Fortune Shoes by 37 per cent, Dragon Sweater and Spinning by 25 per cent and Esquire Knit Composite by 25 per cent in the October-December period last year compared with that in the same period of the previous year.

But the companies did not show reasons for the changes.

Many companies did not post quarterly reports in their web sites, breaking securities rules.

Market experts said that this was not the first time that the listed companies refrained from obeying the BSEC order in this connection, rather the violation was seen in the previous quarters and annual reports too.

BSEC executive director and spokesperson Saifur Rahman told New Age that the department concerned of the commission was monitoring whether the listed companies were complying with securities rules or not.

If it finds any violation, the commission would take action against the defaulting company, he said.

There are companies who have not been disclosing financial reports for years, but the BSEC seldom takes action against the companies, market experts said.

C&A Textile, Emerald Oil, United Air, Miracle Industries, Family Textile and Bangas did not disclose the second quarter reports on the stipulated time.

Market experts said that the absence of proper action and scrutiny by the BSEC encouraged the companies to continue wrongdoings.

The failure in instilling governance into the market was the prime reason for the recent turmoil in the capital market, they observed.