Four directors of the publicly listed company, Miracle Industries Ltd, have expressed their intention to transfer their entire holdings at a recent board meeting considering the dire financial and business condition of the company.
The directors will transfer their holdings to Mehmood Equities Ltd, a private limited company registered with the joint stock.
Miracle Industries is a joint venture of the Bangladesh Chemical Industries Corporation (BCIC) with four individual shareholders.
Miracle Industries has been facing a working capital shortage for the last three consecutive years.
According to its original shareholders agreement, Miracle has two groups of shareholders with BCIC in group "A" holding 20% stake of the company and the four shareholders in group "B" holding a 10% stake.
However, group "B" controls the company's management.
Miracle's board has seven shareholder directors. Among them, three are from BCIC and the rest are from group "B."
Rafiqul Murshed, Wahiduzzaman Chowdhury, Asadur Rahman Mirza, and Pavarton Securities Ltd are the group "B" shareholders.
Rafiqul Murshed is also the managing director of the company.
For the last couple of years, there has been conflict between group "A" and group "B" shareholders of Miracle.
The company held a board meeting on September 3 this year and decided that group "B" shareholders would transfer their holdings to Mehmood Equities Ltd. However, the meeting was adjourned due to unavoidable reasons, said a director of the company seeking anonymity.
He also said, "We are trying to resolve this issue by talking to BCIC."
However, he declined to give more information about Mehmood Equities.
A senior officer of BCIC said "Group 'B' shareholders want to leave Miracle. But we have some allegations against them. We also sent a letter to the Bangladesh Securities and Exchange Commission [BSEC] on this issue."
A BCIC source also said that Miracle borrowed Tk29.80 crore from various individuals without going through banking procedures and adjusted the amount with the company's liabilities.
It also claimed that Miracle submitted its first quarter report of the last financial year without the approval of the board.
Further, Miracle's management did not repay the loan from Shahjalal Islami Bank and became a defaulter. For this reason, the company could not get working capital support from the bank and its production was closed for four months last year.
Miracle's share price surged by 86% in the last two months on the DSE. The stock exchange sent a query notice to the company asking for the reason behind the unusual price hike. The company replied there was no price sensitive information on a price hike. The closing price of the company's shares was Tk31.60 per share on Tuesday at the DSE.
Miracle Industries was founded in 1995. Its manufacturing units are located in Sreepur and Gazipur. The company's business line is the manufacturing of different types of PP woven bags, liner bags with lamination and jumbo bags for bagging: cement, fertiliser, salt, feed, sugar, food grains, and chemicals.
According to the DSE's data, the company has paid-up capital of Tk35.21 crore and belongs to the "B" category of the bourse. Sponsor-directors own 30% shares while general investors hold 70% of the company.
In the first quarter of the last financial year, Miracle reported a loss per share of Tk1.25.
For the 2018-19 financial year, the company gave a 4% stock dividend to its shareholders.