Body formed to probe Shurwid’s dividend trick

The stock market regulator has set up a three-member enquiry committee to figure out the reason behind Shurwid Industries Ltd's failure to disburse a dividend for the year ending on 30 June, 2019.

The Bangladesh Securities and Exchange Commission (BSEC) will take legal action if the packaging company is found guilty in the investigation.

The committee will also try to determine on what basis the board of directors recommended the dividend.

The principal activities of the company are to carry on the business of a drug packaging and food packaging plant by producing PVC film for pharmaceuticals and PP/PVC disposable products for the food industry.

Last year the company entered into the information technology business.

Shurwid has allegedly been giving a false sense of hope to investors who have repeatedly been holding the company's shares.

The regulator earlier appointed Howladar Yunus and Co as a special auditor to investigate the company's financial statements.

Now, the commission has asked the central bank to freeze all bank accounts of Shurwid Industries and its sponsor-directors.  

Moreover, it has ordered a freeze on all types of securities in beneficiary owner's accounts of the company's top insiders, for the time being, on the same grounds.

The 2017 changeover in management of Shurwid Industries created hope among investors.

In May 2018, the company decided to lower its paid-up capital to minimise its accumulated loss.

Failing to do that, Shurwid tried to diversify its business to increase the income and its board of directors recommended a 10% cash dividend for the year ending on 30 June, 2019.

On 29 January, the company reported it had disbursed cash dividends to its shareholders for the above-mentioned financial year.

Later, several shareholders complained to the regulator that they did not receive a dividend and the regulator found the claim to be true.

Shurwid was listed on both stock exchanges in 2014.

The company of Tk57.37 crore paid-up capital posted Tk0.37 earnings per share (EPS) in the financial year 2018-19.

It also posted an EPS of Tk1.89 in the first nine months of the financial year 2019-20 and its net asset value per share stood at Tk14.11 on 31 March, 2020.

In June 2020, Shurwid informed the stock exchanges that the company had to temporarily shut down its factory from 26 March due to the Covid-19 pandemic.

Currently, sponsors and directors hold only 12.01% of the shares in the company, while institutional investors hold 18.95% and general investors 69.04% of the shares. 

This correspondent phoned Shurwid Chairman Engineer Mahmudul Hasan but he did not answer.