The High Court, last week, passed an order of injunction restricting Alhaj Textile Mills to encash any of its fixed deposit schemes.
The HC bench of Justice Zafar Ahmed and Justice Khandaker Diliruzzaman on 29 November passed the injunction order to protect the interest of Alhaj Textile’s investors who own more stake than the sponsors collectively do, said Barrister Sayed Mahsib Hossain, a lawyer of the Bangladesh Securities and Exchange Commission (BSEC).
The BSEC, represented by Barrister A M Masum and Sayed Mahsib Hossain, is fighting a writ petition by the company. One of the sponsor directors of Alhaj Textile, now also claiming the managing directorship, challenged the regulator’s intervention to reconstruct the troubled public company’s board of directors.
Meanwhile, the BSEC sought the injunction order so that neither the company itself nor its disputed Managing Director Mohammed Bakhtiar Rahman can withdraw any money from the fixed deposit schemes.
Mohammed Bakhtiar Rahman did not respond to phone calls for a comment.
Company sources, however, told TBS that under Bakhtiar’s executive leadership, the company has withdrawn nearly Tk6.8 crore from fixed deposits at Janata Bank.
His opponents including sponsor-director and BSEC-recognised Managing Director Md Mizanur Rhaman filed a separate lawsuit at a Dhaka court earlier this year seeking the court’s intervention for prevention of FDR encashment by Bakhtiar Rahman or the company under his control, sources further said.
Due to lack of consensus within the board, the two groups within the Alhaj family now confront each other for control of the oldest listed textile company.
The company has huge assets and also defaulted on loans that were not being cleared, despite having almost an equal amount of cash in fixed deposits.
The BSEC and the group of directors led by Md Mizanur Rahman want to settle loan disputes with the lender Agrani Bank and enable the company to open letters of credit for imports of raw material or capital machinery as it cannot do that due to its loan defaulter status.
However, internal clashes are lingering the company shareholders’ wait for a better business performance, following the end of several legal battles.
Alhaj Textile shares, having face value of Tk10 each, soared to over Tk200 earlier this year when there emerged a possibility of putting the company’s standstill business situation to an end. The no progress dragged it down to the floor price of Tk132.2 per share on the Dhaka Stock Exchange.
Nowadays, the standstill situation, i.e. unsold yarn worth more than Tk20 crore, and internal clashes that made bank transactions tough are exactly the opposite of what investors and the regulator expected from the company.
Observing no “appropriate growth” in business and a director’s share selloff at high price over the 2017-19 period, the BSEC in December 2020 intervened through appointing a special auditor and later independent directors at reconstructed board alongside barring any disposal of the company’s assets, including FDR.