BSEC forms body to probe SS Steel’s investment
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SATURDAY, JANUARY 28, 2023
BSEC forms body to probe SS Steel’s investment

Stocks

Salah Uddin Mahmud
01 November, 2020, 09:30 pm
Last modified: 01 November, 2020, 09:35 pm

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BSEC forms body to probe SS Steel’s investment

The two-member committee will conduct an inquiry and submit a report to the BSEC within 30 working days

Salah Uddin Mahmud
01 November, 2020, 09:30 pm
Last modified: 01 November, 2020, 09:35 pm

The stock market regulator on Thursday set up an inquiry committee to investigate SS Steel's decision to invest around Tk160 crore to acquire 99% of Saleh Steel Industries' stakes.

The Bangladesh Securities and Exchange Commission (BSEC) will take regulatory action if the committee finds any irregularity in this regard.

The two-member committee composed of BSEC's Deputy Director Mohammad Shamsur Rahman and its Assistant Director Md Abdus Salim will conduct the inquiry and submit a report to the commission within 30 working days.

BSEC Executive Director and spokesperson Mohammad Rezaul Karim said, "We want to investigate the company's investment in the interest of the investors. We want to know how the company's shares declined from Tk50 to Tk10."

Earlier, the regulator sought a copy of Saleh Steel Industries' feasibility report prepared by an independent third party.

Consequently, the stock market regulator wanted to know about the share money deposits from its directors.

The commission also sought the details of all its directors – including the independent ones – who were present at the board meeting, along with the meeting minutes.

On 4 August, 2020, the company's board of directors decided to make an equity investment in Saleh Steel to subscribe to 99% of its existing equity shares worth Tk24.75 crore.

Also, SS Steel will invest Tk134 crore in Saleh Steel. Following the move, Saleh Steel will issue new shares to SS Steel.

SS Steel will finance its investment from the company – partly by taking share money deposits from its directors.

SS Steel's board of directors made the decision at a time when the steel industry has already been struggling for a year. Things have become more difficult for the industry amid the pandemic outbreak.

Saleh Steel produces and sells rods and coils under its brand name and its annual production capacity is around 84,000 tonnes, according to SS Steel.

In the three quarters of the last financial year, the company posted 9% growth in revenue to Tk306.46 crore. Its net profit stood at Tk42.47 crore and earnings per share Tk1.51 at that time.

The company disbursed a 15% stock dividend for the financial year that ended on 30 June, 2019.

As of 30 June, 2020, the company's short term loans were Tk182.79 crore and long term loans were Tk32.55 crore. 

The company was listed in January 2019 and raised Tk25 crore from the stock market for its business expansion. Until 31 August, 2020, the company has been able to use Tk6.24 crore.

The company's paid-up capital is Tk281.75 crore.

Sponsors and directors had a 32.33% stake, institutional investors 19.27% and the general public 48.40% in the company on 30 September, 2020. 

Economy / Top News

BSEC / SS Steel

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