BSEC

Back in 2019, the company raised the fund by issuing 8.99 crore right shares for business expansion. It offered right shares at a ratio of three right shares for the existing four shares at a face value of Tk10 each

Even after four years of raising nearly Tk90 crore through the issuance of right shares, publicly listed Golden Harvest Agro Industries Limited—one of the leading frozen food and ice cream sellers in the country—failed to deploy the whole fund.

Back in 2019, the company raised the fund by issuing 8.99 crore right shares for business expansion. It offered right shares at a ratio of three right shares for the existing four shares at a face value of Tk10 each.

But till June this year, the company has been able to use Tk70 crore of the fund. The remaining amount has still not been utilised.

Requesting a time extension to use the fund, Golden Harvest has already applied to the Bangladesh Securities and Exchange Commission (BSEC), but the application is pending.

Seeking anonymity, an official at Golden Harvest said the main reason behind the delay was the Covid-19 pandemic, adding that a big portion has already been used though.

Also, the company faced difficulties in opening letters of credit (LCs) for machinery acquisition because of the dollar crisis and other economic uncertainties, he added. 

Now, the company seeks more time to use the rest of the amount for opening an LC for machinery, the official further stated.

Earlier, the BSEC questioned the company for not using its right share fund properly.

According to BSEC sources, the firm had used funds from Braintrain Studio Ltd, which is Golden Harvest’s own company, and provided excessive advances for its infrastructure development.

Also, the commission found that the same person holds the post of managing director at both Golden Harvest and Braintrain Studio.

This means, the payment between the companies is known as a related party transaction, which is permissible only upon approval by investors. However, the company made the transaction without following the due process.

Business ups and downs

Before its stock market listing in 2013, the company had shown promising business.

In June 2011, its revenue stood at Tk52.65 crore, and net profit after tax Tk13.23 crore, which was the best year for Golden Harvest’s business.

Then in 2018, the company filed for issuing right shares to expand its business, and it secured the BSEC approval in October 2019.

However, after receiving the right share fund, its revenue and net profit have faced declines.

In the 2020-21 and 2021-22 fiscal years, the company’s revenue dropped significantly and it incurred huge losses.

As a result, the general investors are deprived of their expected returns from the company.

In the July to September quarter of 2023, the company’s revenue stood at Tk28.45 crore, which was Tk24.55 crore in the same period of the previous year.

Its finance cost rose 24% to Tk4.02 crore, and after-tax net profit stood at Tk5 lakh.

In the last fiscal, the company recommended a 1% cash dividend for its shareholders.

As of 31 October 2023, sponsors and directors jointly held 30.42% shares of the company, institutions 36.97%, foreign investors 0.40%, and general investors 32.21%.

Golden Harvest’s shares closed at Tk16.50 each at the Dhaka Stock Exchange on Sunday.

source: tbsnews.net

golden harvest share fund

Al-Amin Chemicals Industries, having raised Tk25 crore by issuing fresh shares without prior consent from the Bangladesh Securities and Exchange Commission (BSEC), now wants post-facto approval.

The chemical products manufacturer has recently written to the commission requesting post-facto approval for the increased paid-up capital.

Al-Amin Chemicals, which got listed in the capital market in 2002, has been lying around in the over-the-counter (OTC) market since 2009 owing to several irregularities.

The company had applied to the Dhaka Stock Exchange (DSE) for relisting on the SME platform.

But owing to all the irregularities and also no consent from the BSEC, the DSE rejected the company’s application.

The chemical firm’s Managing Director Munshi Shofiuddin told The Business Standard, “We are now seeking post-facto approval for the paid-up capital.”

He added, “We raised capital of Tk25 crore through private placement to some investors. A portion has been invested in the company for renovation, raw materials acquisition, and working capital. Around Tk10 crore has been invested in the stock market.”

In October this year, the DSE carried out an inspection at Al-Amin Chemicals and uncovered some anomalies.

According to the inspection report, which was submitted to the BSEC, the company’s new owners raised capital without the regulator’s consent, and issued shares in favour of shell or shadow firms.

Also, the new owners altered the investment plan of utilising the fund, and their new strategic business plan does not support the company’s present performance.

Therefore, the DSE expressed concerns about the company’s efforts to protect the interest of investors and its contribution to developing a sustainable capital market.

The new owners issued 2.5 crore fresh shares at Tk10 each. The company’s shares last traded at Tk31 each at the DSE on 30 November.

The free-float shares now stand at 8.64%, which was 51.82% before the issuance of new shares.

More focus on stocks, less on core business

According to the DSE inspection report, Al-Amin Chemicals was supposed to invest Tk5 crore of the raised fund in the capital market. Instead, the company invested Tk10.28 crore in the stock market and took a margin loan of Tk4.63 crore. So, the total value of investment in the stock market stood at Tk14.16 crore.

Till 12 October 2023, its unrealised loss stood at Tk75 lakh owing to the downturn of the stock market. 

When questioned, Munshi Shofiuddin said, “We invested more funds than our plan because we cannot keep the fund idle. Stock prices in the market are now at the bottom line, so we think we will get good returns in future.”

Share issuance in favour of shell or shadow firms

The DSE inspection team found that Al-Amin Chemicals issued new shares to three corporate shareholders who have no visible operation since their incorporation.

Eshaal Communication Limited, represented by Aminul Islam Sikder and Md Khirul Bashar, held 32.4% shares of Al-Amin Chemicals.

The company was incorporated in 2002 and has no revenue for 2022. Its retained earnings as on 30 June 2022 is Tk15 lakh.

Lava Electrodes, which was formed in 2016 and has retained earnings of Tk72 lakh as on 30 June 2022, owns 5.4% shares.

Monarch Mart Limited, incorporated in 2022, owns 10.8% shares of Al-Amin Chemicals. Monarch Mart’s revenue and retained earnings in 2022 stood at Tk7.82 crore.

The report said Eshaal Communication and Monarch Express invested in Al-Amin Chemicals by taking a loan from Lava Electrodes Industries Ltd.

The DSE team raised concern that Md Abul Khayer Hiru, his wife Kazi Sadia Hasan and their associates are the lenders of Lava Electrodes.

Lava Electrodes borrowed Tk19.73 crore till 30 June 2022.

The DSE found that the present business situation of Al-Amin Chemicals does not reflect its strategic business plan regarding products manufacturing and revenue earnings.

Munshi Shofiuddin said, “We provided the company’s business plan to the commission. Because of difficulties in opening letters of credit (LCs), and the economic crisis, we did not fulfil the plan. We hope we can fulfil the plan very soon. Our revenue is growing, and profit will increase.”

source: tbsnews.net

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