Cash dividend of Butwal Power likely to find its way to the bank accounts soon; What was the reason of the delay?

Tue, Jul 10, 2018 11:33 AM on Dividend, Bonus & Rights, Stock Market, Latest,

Butwal Power Company Limited (BPCL) had convened its 25th AGM on Jestha 8, 2075. In the AGM, the company had endorsed the earlier decision to provide 20% cash dividend to its shareholders.

However, it has been 48 days after the endorsement of the dividend in the AGM but the cash dividend has not been received by the shareholders.

As per Company Act 2063, Section 182, dividend shall be distributed to the shareholders within forty five days of the decision made to provide dividend. Sub-section 3 of the same section states that, in the event of failure to distribute a dividend within the time limit, the dividend shall be distributed together with the interest thereon at such rate as may be prescribed.

Following on the matter, NMB Capital (share registrar of BPCL) clarified that the delay was caused because the Ministry of Energy had not provided its final approval to distribute cash dividend to the shareholders. As of now, the approval has been provided by the ministry and the cash dividend is likely to find its way to the shareholders bank account from next week.

But, is this justifiable to the shareholders? The share price of the company has been continuously declining for the last 5-6 months. It has not been a profitable deal to purchase the shares of BPCL. And in such a time the delay in the distribution of cash dividend has not been a good news for the investors.

We can hope that the cash dividend will be distributed soon and the shareholders of the company can get some benefit from the investment made in the company.