After failing to hold its annual general meeting (AGM) for fiscal year 2023–24, National Tea Company, a listed firm on the stock exchange, has now also failed to publish its financial statements for the last two quarters of the current fiscal year, up to December 2024, keeping investors in the dark.
Both failures — not holding the AGM and not disclosing six months’ financials — constitute non-compliance with stock exchange listing rules.
As a result, the primary regulator of the listed companies, the Dhaka Stock Exchange (DSE), issued a letter in mid-last month to the company, seeking an explanation for these non-compliances, according to sources.
However, the government-owned listed firm has been struggling to operate amid a fund crisis and political unrest, following a regime change in August last year triggered by mass protests.
Keep updated, follow The Business Standard’s Google news channelAs a result, its financial losses have continued to mount, with the tea producer incurring heavy losses over the past five fiscal years, according to its financial statements.
When contacted regarding the non-compliance, National Tea’s Company Secretary AK Azad Chowdhury did not respond to multiple phone calls.
Md Shakil Rizvi, a shareholder-director at the company, told The Business Standard that the company failed to submit its half-yearly financials due to a lack of manpower and it has applied to the regulator for a three-month extension to submit the reports.
“However, we have yet to receive a response from the Bangladesh Securities and Exchange Commission (BSEC),” he said.
When asked about the company’s current situation, Rizvi said, “National Tea ran into trouble during the [Covid-19] pandemic, as tea production took a hit. Since then, it has been struggling to stay afloat due to loan burdens. Also, many irregularities occurred in past years.”
He added, “Now, the situation is so dire that the company has even failed to pay its electricity and other utility bills due to a fund crisis.”
Meanwhile, TBS obtained a copy of the company’s reply to the DSE, in which it stated that the non-compliance occurred due to the non-submission of half-yearly financials for the current fiscal year.
3-month time extension sought
In the letter, National Tea submitted a time extension prayer for three months for submission of un-audited quarterly financial statement for the period ended on 31 December.
“It is to be mentioned here that due to the July-August political matter and its after effect the activities of the company hampered severely. Also due to resignation of six directors in August, the board committees became ineffective. Also after the resignation of a chief financial officer of the company, it became very difficult for the finance and accounts department to prepare financial reports with manpower constraints,” reads the letter.
Despite this finance and accounts department worked hard to prepare the financial statements within an extended time, it added.
The letter also states that the board of directors and its committees have been formed and they started activities in full swing. “We are hopeful to clear the backlog of works within the shortest possible time,” reads the letter.
Considering its present situation, the company requested the DSE to exempt the penalty of Tk5,000 per day upon delayed submission of the second quarter financial statement.
According to its disclosures published on the DSE website in January this year, National Tea incurred a loss of Tk107.49 per share, which is higher than Tk96.24 loss for per share.
In September 2022, the company decided to increase its paid-up capital through private placements among the existing shareholders to raise Tk279 crore to support the business growth (field and factory development), finance the working capital need along with repayment of bank loan.
The company planned to increase its paid-up capital from Tk6.6 crore to Tk30 crore to comply with regulatory requirements.
In October 2024, the BSEC formed a three-member inquiry committee to investigate various issues related to the placement of shares and financial dealings of National Tea.
Also, the commission decided to extend the subscription period for National Tea’s placement shares until 31 March 2025.
The extension depends on the government maintaining at least a 51% share in the company and will only be allowed to utilise the funds if the condition is met, the regulator said.
Although the extended time expired, as per sources, the subscription of placement shares is yet to be completed.
NTC
https://www.tbsnews.net/economy/stocks/steeping-trouble-national-tea-keeps-investors-dark-1118016
