The Dhaka Stock Exchange (DSE) has rejected the application of two companies – Al-Amin Chemical Industries and Rangamati Food Products – for transferring their shares from the over-the-counter (OTC) market to its SME platform.

The DSE denied the application on grounds that both companies breached stock regulations by raising capital without consent from the Bangladesh Securities and Exchange Commission (BSEC) and submitting misleading financial documents.

Besides, the operational status of both firms is not up to the mark, the DSE said in separate rejection letters to the companies yesterday.

The BSEC had launched the DSE-SME, a small-cap board, on April 30, 2019 so that small-and-medium enterprises (SMEs) having paid-up capital of between Tk 5 crore and Tk 30 crore can avail financing from the stock market.

The management of the DSE inspected both companies' factory premises and their relevant papers to analyse their physician and financial situation before allowing them to enter the SME platform.

The DSE found that Al-Amin Chemical had raised capital of Tk 25 crore without prior consent of the BSEC, contravening the securities rules.

Also, the company's strategic business plan does not reflect its present operational status, the DSE said in its letter.

Additionally, Al-Amin Chemical does not have environmental certification or import registration.

Therefore, the management of DSE denied the transfer of the company's shares from the OTC market to the SME platform, it added.

Regarding Rangamati Food, the country's premier bourse said it raised capital of Tk 40 crore without prior consent of the BSEC.

The food producer submitted false and misleading information for raising and utilising capital from the stock market.

Also, the company's current operational status does not reflect its strategic plan, the DSE said in its letter.

The OTC market was launched in 2009 with 51 companies.

These companies were moved to the OTC market from the main trading board of the DSE because of their underperformance in business, failure to hold shareholders' annual general meetings, and converting their shares into electronic ones instead of paper certificates.

Later, 29 more companies were sent to the OTC market. So far, 14 companies have been transferred to the SME board from the OTC market.