Stock Market

The managing director of Beacon Pharmaceuticals has been identified as a manipulator of the stock of Khan Brothers PP Woven Bag Industries in 2023 and accordingly penalized for the misconduct.

He, however, acted in collaboration with his kith and kin and his company officials. Now, all of them are facing an aggregate penalty of Tk 8.7 million.

The individuals and companies that will have to pay the fines are Mohammad Ebadul Karim, managing director of Beacon Pharmaceuticals; Risana Karim, Ulfat Karim, Beacon Medicare, Beacon Medicare Employees CPF, Beacon Developments, Md Sohel Alam, Mijanur Rahman, Md Azad Hossain Patwary, Md Nasir Hossain and Md Akter Hossain.

The securities regulator asked them to deposit the money within 30 working days from March 19 and warned of further actions for non-compliance.

The Bangladesh Securities and Exchange Commission (BSEC) also fined four individuals and 21 companies Tk 17.8 million in total for artificially inflating the stock price of Alltex Industries in 2022.

The fines were imposed following hearings held on the basis of investigation reports submitted by the Dhaka Stock Exchange (DSE). The BSEC announced the penalties on its website on Wednesday.

According to the probe findings, the manipulators had engaged in coordinated transactions within their networks, creating a false impression that the stocks were in high demand even in the bearish market.

The inquiry team randomly examined documents collected from different TREC [Trading Rights Entitlement Certificates] holders of clients who had transacted shares of Khan Brothers and Alltex Industries.

The manipulators artificially drove up the stock prices through multiple brokerage firms and several beneficiary owner’s (BO) accounts.

What happened to Khan Brothers?

The DSE inquiry team looked into Khan Brothers’ price movement between March 5, 2023 and July 13, 2023 on the prime bourse. It learnt that the stock jumped 196 per cent or Tk 19.40 each share to Tk 29.30 per share during the time.

The stock of Khan Brothers closed at Tk 133.2 per share on Wednesday on the Dhaka bourse despite the company’s poor business performance, which indicates that the stock is still subject to artificial rallies. The company made losses of Tk 48 million in the four years to FY23. It then reported a profit of Tk 0.86 million for FY24 and paid only 1 per cent cash dividend for the year.

Analyzing the relevant documents, the DSE team concluded that Beacon Group & associates had directly and indirectly influenced the stock’s movement on the bourse in 2023 by creating a demand for the stock.

Beacon Group further violated the securities rules as it held more than 10 percent stake in Khan Brothers during the period without prior declaration.

As per the securities and exchange ordinance 1969, any investor, who wants to hold or acquire more than 10 per cent shares of a listed company, must announce their intention through the stock exchanges before trading in the shares.

However, they did not follow the rule. So, it is deemed that Beacon Group transacted shares “unfairly” to get benefits, according to the BSEC.

The manipulator gained Tk 1.18 million through price manipulation while unrealized gains amounted to Tk 41.1 million.

The BSEC said Beacon Group’s clarification regarding the transactions was not acceptable. So, it imposed a fine of Tk 8.70 million on Beacon Group and its accomplices.

Stock manipulation of Alltex Industries

The DSE inquiry team conducted an investigation into Alltex Industries’ price movement between December 27, 2021 and March 22, 2022.

During the time, the stock soared 88.6 per cent to Tk 28.1 per share.

Investigators revealed that Md Masudur Rahman, Md Sheikh Jashim Uddin and their associates had traded in shares of Alltex Industries to push the price up.

They influenced buy-and-sell activities in the stock using 28 BO accounts opened with multiple brokerage firms.

They collectively bought 5.12 million Alltex shares and sold 7.11 million, accounting for 27.55 per cent of the total trade volume of the stock during the period.

The manipulators realized capital gains of Tk 20.73 million during the time.

They too have to deposit the fines within 30 working days from March 27. Otherwise, further actions will be taken, said the market watchdog.

https://today.thefinancialexpress.com.bd/stock-corporate/beacon-pharma-md-fined-for-inflating-price-of-khan-brothers-1744825273

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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.

As 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

The Dhaka Stock Exchange (DSE) has sought an explanation from Beacon Pharmaceuticals regarding why the medicine manufacturer stopped its exports abroad without issuing any disclosure on the website of the premier bourse.

The DSE informed shareholders about seeking clarification from Beacon through a disclosure yesterday.

On March 27, the Dhaka bourse sent the query to Beacon based on a news item published in The Daily Star on the same day.

Today, the drug maker issued a disclosure on the DSE website, stating:

“Beacon Pharmaceuticals PLC has always remained committed to complying with the regulatory requirements of Dhaka Stock Exchange PLC.”

“As a publicly listed company, we consistently publish our Financial Statements and Price Sensitive Information (PSI) on a quarterly basis. In addition, our Annual Report provides a comprehensive overview of the company’s financial performance, strategies, and other relevant disclosures.”

“Regarding the sale of products to Beacon Medicare Limited, we would like to confirm that such transactions are part of our strategic and technical collaborations, and they are carried out in full compliance with the applicable regulations of the Exchange,” the pharma company added.

Today, the stocks of Beacon Pharmaceuticals PLC dropped 1.97 percent to Tk 119.5 on the DSE.

ইউনাইটেড কমার্শিয়াল ব্যাংক (ইউসিবি) ২৯০ কোটি টাকার বকেয়া ঋণ আদায়ের লক্ষ্যে শেয়ারবাজারে তালিকাভুক্ত এসএস স্টিল লিমিটেডের সম্পদ নিলামে তুলেছে।

ব্যাংকের প্রগতি সরণি শাখা কর্তৃক জারি করা একটি নিলাম বিজ্ঞপ্তি শুক্রবার (১২ এপ্রিল) দৈনিক সংবাদপত্রে প্রকাশিত হয়েছে, যেখানে আগ্রহী ক্রেতাদের আগামী ৮ মে এর মধ্যে দরপত্র জমা দেওয়ার আহ্বান জানানো হয়েছে। ।

নিলামের নোটিশ অনুসারে, নারায়ণগঞ্জে ১৩৫.৭৯ শতাংশ জমি-কারখানা ভবন ও যন্ত্রপাতি এবং চট্টগ্রামে ১৯৯.১২ শতাংশ অবকাঠামোগত জমির নিলাম অনুষ্ঠিত হবে। সমস্ত সম্পদ এসএস স্টিলের মালিকানাধীন।

নিলাম বিজ্ঞপ্তিতে ব্যাংকটি জানিয়েছে, এসএস স্টিল তার জমি বন্ধক রেখে ঋণ নিয়েছে। চুক্তি অনুসারে, ঋণ আদায়ের জন্য আদালতের অনুমোদন ছাড়াই বন্ধক রাখা জমি বিক্রি করার জন্য ব্যাংক কর্তৃপক্ষকে অনুমতি দেওয়া হয়েছিল। কোম্পানিটি সময়মতো ঋণের কিস্তি পরিশোধ করতে ব্যর্থ হওয়ায় বন্ধকী জমি বকেয়া আদায়ের জন্য নিলামে তোলা হচ্ছে।

এর আগে জানুয়ারির শুরুতে ব্যাংক এশিয়া ১৬৭ কোটি ৫৬ লাখ টাকার বকেয়া ঋণ আদায়ের জন্য এসএস স্টিলের সম্পদ নিলামে তোলার ঘোষণা দিয়েছিল।

নোটিশ অনুসারে, গাজীপুরে ১৪৮.৫ শতাংশ জমি-কারখানা ভবন এবং যন্ত্রপাতি নিলামে তোলা হয়। সমস্ত সম্পদ এসএস স্টিলের মালিকানাধীন।

ব্যাংক সূত্র জানিয়েছে, কোম্পানিটি প্রথমে কার্যকরী মূলধনের জন্য একটি ডিমান্ড লোন নিয়েছিল। তবে একাধিক নোটিশ সত্ত্বেও এসএস স্টিল সময়মতো ঋণ পরিশোধ করতে ব্যর্থ হওয়ায় নিলামের প্রক্রিয়া শুরু করা হয়।

ব্যাংক এশিয়ার সাথে বিরোধ নিয়ে ঢাকা স্টক এক্সচেঞ্জের (ডিএসই) এক প্রশ্নের জবাবে কোম্পানিটি জানিয়েছিল, এসএস স্টিল তার আইন বিভাগের মাধ্যমে ব্যাংক এশিয়া এবং অন্যান্য আর্থিক প্রতিষ্ঠানের নিলাম বিজ্ঞপ্তি মোকাবেলা করবে এবং তার গ্রাহক, শেয়ারহোল্ডার এবং অংশীদারদের প্রতি প্রতিশ্রুতিবদ্ধ থাকবে।

উল্লেখ্য, ২০১৮ সালে এসএস স্টিল তার প্রাথমিক গণপ্রস্তাবের (আইপিও) মাধ্যমে শেয়ারবাজারে ২ কোটি ৫০ লাখ শেয়ার ইস্যু করে ২৫ কোটি টাকা সংগ্রহ করেছে।

২০২০ সালের আগস্টে এসএস স্টিল সালেহ স্টিলে প্রায় ১৬০ কোটি টাকা বিনিয়োগ করে এবং কোম্পানির ৯৯ শতাংশ শেয়ার অধিগ্রহণ করে। সালেহ স্টিল তার ব্র্যান্ড নামে রড এবং কয়েল উৎপাদন ও বিক্রি করে এবং এর বার্ষিক উৎপাদন ক্ষমতা প্রায় ৮৪ হাজার টন।

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Bangladesh Bank has appointed its Executive Director (ED) Mojibur Rahman as the Managing Director of ICB Islami Bank.

The central bank made the decision after dissolving the bank’s board of directors over allegations of corruption and mismanagement, reports UNB.

According to a Bangladesh Bank order, the appointment aims to safeguard the interests of depositors and the bank itself, while ensuring good governance in banking operations.

Mojibur Rahman will exercise the powers and perform the duties of both the Board of Directors and the Managing Director.

The order notes that due to significant weaknesses in the bank’s management and board, ICB Islami Bank has been facing capital and provisioning shortfalls.

It also highlights a large volume of classified investments and accumulated losses, worsened by management instability and a severe liquidity crisis. Besides, the bank’s policymaking failures have severely undermined governance and compromised depositor interests.

As a result, the existing board has been dissolved under the Bank Companies Act in the interest of depositors and public welfare. https://www.tbsnews.net/economy/stocks/crisis-deepens-hami-industries-what-lies-ahead-1113071

After a significant setback, following the original owners fleeing abroad, a ray of hope emerged for Hami Industries, formerly known as Imam Button Industries, when a general shareholder took charge to run the company.

However, the company’s crisis deepened when the new owner died, leading to various non-compliance issues.

Amid the failure to publish quarterly and annual financials of the current fiscal year 2024-25, the Dhaka Stock Exchange (DSE), the primary regulator of listed firms, revealed that Hami Industries had provided misleading information to investors and violated securities laws regarding the appointment of a shareholder director to the board.

The finding stated that it falsely listed Rifat Ara Papri as a shareholder-director, claiming she held 2.589% of the company’s shares.

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However, this appointment was made without approval from the company’s board of directors and was not included in any official board meeting agenda.

In September 2024, ASM Hasib Hasan, the managing director of Hami Industries PLC, passed away. Following his death, the company faced significant challenges, compounded by widespread political and economic uncertainty across the country.

On Wednesday, the company’s share price, classified under the Z or junk category, closed at Tk125.30 on the Dhaka bourse.
In February 2023, Hasib assumed the role of managing director and took responsibility for the company, aiming to revive the business.

DSE finding on shareholder director

DSE’s investigation further revealed that the company secretary and other board members were unaware of the appointment, indicating a serious lapse in corporate governance. This act by Hami Industries constitutes clear noncompliance with the regulations set by the Bangladesh Securities and Exchange Commission (BSEC), officials say.

According to a report by the DSE, the shareholding position of Hami Industries, as per the monthly reports for August and September 2024, indicated that Rifat Ara Papri was listed as a shareholder-director, holding 199,402 shares, which accounts for 2.589% of the company’s total shares. These shares were blocked in the Block Module of the Central Depository Bangladesh Limited (CDBL).

However, a review of the board meeting minutes of Hami Industries from 29 January 2024 to the present showed no discussion or approval regarding the appointment of Papri as a director. There is no official record indicating that her appointment was ever considered or endorsed by the board.

In a legal opinion collected by the DSE, it was revealed that in August 2024, Hasib informed the BSEC that Papri had been appointed as a director during a board meeting held on 17 August 2024, leading to the blocking of her shares.

However, following Hasib’s death in September 2024, it was discovered that the minutes of the mentioned board meeting contained no such agenda or resolution. Moreover, the company secretary and another director confirmed that they were unaware of her appointment.

This indicates that the blocking of Papri’s shares was based on misrepresentation by Hasib.

In light of this, the Listing Affairs Department of DSE took corrective action by updating the records in the CDBL Block Module and unblocking the shares of Papri. She is now recognised as a general shareholder, not a director.

Director appointment planned to buy shares with margin loans

Meanwhile, officials of Hami Industries, speaking on condition of anonymity, said that the company’s former managing director had submitted certain information to the Dhaka bourse and the BSEC, which later drew the attention of both the regulators and the company.

Following an internal review, it was discovered that the former managing director had purchased shares on margin through two separate Beneficiary Owner (BO) accounts, one of which belonged to Papri. He subsequently listed one of these BO account holders as a shareholder-director of the company — without proper approval or board resolution.

The issue surfaced when the involved brokerage firms issued margin calls against both BO accounts and later filed a formal complaint with the BSEC regarding one of them. While one of the complaints has already been resolved, the other case remains pending with the regulator.

Meanwhile, the company’s current management is facing difficulties, which has led to an inability to hold board meetings. In this situation, the company has applied to the BSEC for the appointment of two independent directors.

The BSEC has requested additional information from the company on this matter. However, the company’s management remains optimistic that a solution will be reached soon and normal operations will resume.

Officials of Hami Industries said they later discovered there was no fish farming project under the company’s name, and no investment had been made in such a project.

Regarding the company’s current situation, they mentioned that a fish farming project has now been established in Cumilla’s Daudkandi that is currently operational. Additionally, the main factory of the company has an active shoe manufacturing unit. A portion of the factory has also been leased out, providing the company with an additional income stream.

Hami Industries has not yet approved its annual audited financial statements for the fiscal year ending 30 June 2024, nor its unaudited quarterly financial statements for the period ending 30 September 2024.

Furthermore, it has been found from the shareholding reports of the sponsors and directors of Hami Industries that the current management has violated several securities regulations.
https://www.tbsnews.net/economy/stocks/crisis-deepens-hami-industries-what-lies-ahead-1113071