Bangladesh regulator searches for billions in unclaimed, undistributed dividends

Bangladesh Securities and Exchange Commission or BSEC has begun searching for tens of billions of takas in unclaimed and undistributed dividends announced by the listed companies for their investors.

The capital market regulator is also planning to use the unclaimed money after final calculation to safeguard the interests of the capital market and its investors.

Mohammad Rezaul Karim, acting executive director of BSEC, said they were trying to find out the amount of unclaimed and undistributed dividend, both in cash and stocks, from different sources.

BSEC has written to 400 registered companies and mutual funds and the stock exchanges for information, an official related to the task said.

According to information gathered by the Central Depository Bangladesh Limited or CDBL until Oct 25, as many as 250 out of the 400 listed companies have unclaimed and undistributed dividend of Tk 170 billion in cash and stock left with them.

The amount includes Tk 30 billion dividend in cash while the rest of it is in securities.

The accounts may vary after an update, the official said.

“We’ll finalise the total amount after receiving the information from all companies and stock exchanges. The total amount will become quite hefty after compiling the information from all the sources,” he added.

WHAT IS UNDISTRIBUTED AND UNCLAIMED DIVIDEND?

After the companies announce their dividends, the money is sent to the investors’ accounts. Cash dividend is deposited to the bank account of an investor, while the stock dividend is deposited in the beneficiary owners or BO account.

When a shareholder dies, moves abroad or does not contact for a long time, their bank account and BO account are closed or become dormant.

In such a case, the dividend amount does not get deposited to the investor’s bank or BO account and bounces back to the company. Sometimes, the nominated inheritors   confront legal hurdles to get the money following the death of an investor.

Besides these, the dividends sometimes do not reach the investor for other legal complications. The companies then prepare their final financial account showing those dividends under a ‘suspended’ account.

CDBL provided the information of Tk 170 billion of unclaimed and undistributed dividend from such 3,315 suspended accounts.

BSEC’S PLAN

Majority of the registered companies have such unclaimed and undistributed dividends, a high up in the regulatory authority told bdnews24.com.

Some of it may get claimed in time and get settled.

“At first, we want to figure out the amount of unclaimed and undistributed dividend. After we do that with no one left to claim, we plan to use it for the benefit of the market and its investors.”

BSEC has now taken initiatives to stabilise the capital market after a change at the top, including chairman and commissioners in May.

In India, the unclaimed and undistributed dividend can be left suspended for seven years before it goes to the investor security fund.

"We don’t have such funds or policies here,” said a BSEC official. “So, we’re planning to introduce something similar,” he added.