The Bangladesh Securities and Exchange Commission (BSEC) on Sunday issued a clarification, rejecting media reports that claimed the regulator had decided to immediately delist companies that have remained closed or inactive.

In a press release, the Commission described the reports as completely misleading and baseless, saying they did not accurately reflect the remarks made by BSEC Chairman Masud Khan during an exchange of views with the Capital Market Journalists' Forum (CMJF) on July 9.

The BSEC said the Chairman had referred to international practices, where companies that remain closed or inactive for prolonged periods are generally not allowed to stay listed on stock exchanges.

He also noted that Bangladesh is an exception, with several inactive companies continuing to remain listed, exposing particularly small investors to financial risks, reports BSS.

The Commission clarified that no decision has been taken to delist such companies.

According to the BSEC, the Dhaka Stock Exchange (DSE), as the frontline regulator, is currently reviewing the status of inactive listed firms to develop a logical and transparent process for addressing the issue.

As part of the review, a proposal has been discussed to allow inactive companies a grace period, possibly one year, to resume operations.

If they fail to do so within the stipulated period, any further action will be taken in accordance with the existing laws, rules and listing regulations, it said.

The regulator also urged investors to exercise caution while making investment decisions, particularly regarding companies that have remained inactive for a prolonged period, face going concern risks, fail to hold mandatory annual general meetings (AGMs), or do not pay dividends to shareholders.

The clarification was issued through an official press release signed by the BSEC spokesperson.