The Bangladesh Securities and Exchange Commission (BSEC) has asked Shepherd Industries Ltd not to buy 1.55 crore shares, worth Tk15.50 crores, of name-only company Shepherd Jeans Ltd.
In this regard, the company secretary of Shepherd Industries Mohammed Abu Jafor told The Business Standard, "The BSEC sent a letter to us regarding the issue. We replied to the letter. Yet, the commission directed us to refrain from buying the shares. We will adhere to the directive."
On October 24, the board of directors of Shepherd Industries decided to buy 1.55 crore shares – each share priced at Tk10 – of Shepherd Jeans. The share price was fixed considering the lands, buildings, and machinery of Shepherd Jeans.
However, according to an investigation by the BSEC, Shepherd Jeans was incorporated on April 9 this year.
The company failed to show TIN, trade license, import registration certificate, export registration certificate, bonded warehouse license, VAT registration certificate, BGMEA membership, EPB license, factory license, fire license, and environment clearance certificate.
Shepherd Jeans does not even have an office. The office of Shepherd Industries has been shown as Shepherd Jeans' office.
Furthermore, there are only two directors in Shepherd Jeans' board of directors who are also the chairman and managing director of Shepherd Industries, respectively.
The BSEC investigation reveals the valuation of the lands, buildings, and machinery of Shepherd have not been done according to BSEC laws.
The total value of the property of Shepherd Jeans has been shown as Tk8.07 crores on the agenda at the board of directors meeting. But in 2018, the valuation of the buildings of Shepherd Jeans factory, done by the Artistic Properties Ltd, was shown as Tk8.20 crores.
Under this circumstance, the BSEC directed Shepherd Industries to not buy any shares of Shepherd Jeans for the sake of market investors.
In the Dhaka Stock Exchange, the closing price of Shepherd Industries was Tk32.90 on Thursday. In the last one year, the highest price of its shares reached Tk50.
In the fiscal year 2018-19, the company recommended a 10 percent stock dividend for its shareholders. The record date was November 25.
The company will arrange its annual general meeting on December 26 this year. In the last fiscal year, the earnings per share (EPS) was Tk0.90. In the 2017-18 fiscal year, its EPS stood at Tk1.15, meaning it dropped by 22 percent.
In the first quarter of the current fiscal year, the EPS of the company stood at Tk0.24, decreasing by 43 percent. In the previous year, the EPS was Tk0.42 for the corresponding period.