The stock market watchdog has restructured the board of First Finance as the company has been performing poorly for a long time.

At present, the company's accumulated loss stands at Tk 325 crore and the total shareholders' equity is Tk 169.8 crore in the negative, according to the letter the Bangladesh Securities and Exchange Commission (BSEC) sent to the company.

Today, the BSEC letter was posted on the website of the Dhaka Stock Exchange (DSE).

According to Investopedia, shareholder's equity is a company's net worth and it is equal to the amount that would be returned to the shareholders if the company must be liquidated and all its debts are paid off.

If a company's shareholder equity remains negative, it is considered to be balance sheet insolvency.

First Finance got listed with the stock exchange in 2003 and was downgraded as a Z category share in 2016 because of its failure to provide any cash dividend to its shareholders for the last 14 years.

On top of that, around 86.6 percent of the company's loans have become non-performing loans.

The share price of the company is Tk 5.5 now and it could not find any buyer for many days.

"There are several irregularities and instances of non-compliances that have negative implications for investors, and hence undermine the trust and confidence of investors," the BSEC said.

It potentially led financial losses and diminished the reputation of the company, the commission said.

In this situation, the stock market regulator directed the chairman, directors and managing director of the company along with both the stock exchanges to reconstitute the board of the NBFI.

The regulator has ordered the company to include five independent directors in its board, which are: Abul Kalam Mohammad Humayun Kabir, Khandoker Nizamuddin, Mohammad Rafiqul Islam Rowly, Prof Mohammad Shofiqul Islam and Qazi Moinuddin Mahmud.

The board of directors of First Finance shall be reconstituted, within 45 working days from the issuance of this directive incorporating five new independent directors to the board of directors of the company, the BSEC letter read.

The Dhaka Stock Exchange and Chittagong Stock Exchange shall monitor every phase of activities of the issuer company and shall report the matter to the commission in due course, it added.

This is not the first board reconstruction to be done by the BSEC.

During 2019 to 2021, the stock market regulator restructured the board of C&A Textiles, Ring Shine Textiles, United Airways, Familytex (BD), Emerald Oil, Fareast Finance, Fareast Islami Life Insurance, FAS Finance, BD Wielding, and Al-haj Textiles.

Some of them are trying to rebound while some are still struggling.