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Wednesday, May 23, 2007

SEC fines 16 company directors for breaching accounting principles

The Securities and Exchange Commission (SEC) Monday fined 16 directors of three companies Tk 0.1 million (1.0 lakh) each for giving misleading details about financial health, reports directors were from Dynamic Textile Industries, Lexco Limited and Sajib Knitwear and Garments.The capital market regulator said the companies had violated rules as they did not make their annual reports on the basis of international accounting standards (IAS)-a set of globally accepted principles for financial statements. It has resulted in giving misleading picture about the financial health of these companies. Investors could have got a fair impression about the situation of the companies if they followed international norms.
This fabrication practice of financial statements only discourages investors about stock market activities. Technical fundamentals to assess value of an issue prove useless when the numbers are all fictitious. But I hope as watchdogs like SEC tighten their grip on ill-practicing companies, investors will gain confidence about Bangladeshi stock markets.

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