Financial keys as of 2019
- Accumulated loss Tk152.22cr
- Net loss Tk71.80cr
- Bad loan Tk132.30cr
- Net Asset Value reduced to 2.85 from Tk7.22
- Interest income reduced by 38.62%
- Investment income only Tk25 lakh
- EPS loss Tk4.38
The stock market regulator has restructured the board of directors of the ill-performing non-bank financial institution Fareast Finance and Investment in a move to bring the company back to a sound business footing and protect the investors' interest.
This is the first non-banking financial institution that came under the restructuring of its board by the Bangladesh Securities and Exchange Commission.
The commission has proposed former Sonali Bank chairman Md Ashraful Moqbul for the post of chairman at Fareast Finance and nominated independent directors along with three sponsor-shareholders directors for the board.
On Monday, the Bangladesh Securities and Exchange Commission issued letters in this regard.
Fareast Finance and Investment was supposed to reshape its board within 45 working days as per the Category Z rules, but the company failed to comply with the regulation.
The independent directors will submit to the commission a previous-month report on the company's compliance and progress status within 10 days of every month.
The sales, mortgage, transfer, replacement and pledges of the shares held by all sponsors and incumbent directors of the Category Z company will remain stopped.
In 2013, Fareast Finance and Investment raised Tk45 crore from the capital market through an initial public offering.
The company had MA Khaleque as its chairman and Nazim Asadul Haque as director, both of whom were known as controversial businessmen.
In March 2020, the Anti-Corruption Commission barred Khaleque from leaving the country.
Khaleque held key posts in a variety of enterprises. He was a former vice-chairman of Prime Bank Ltd, former director of Fareast Islami life Insurance, former chairman of Prime Islami Insurance and Primeasia University trustee board chairman.
Besides, the anti-corruption watchdog has an ongoing investigation against Khaleque on charges of embezzling money from Prime Asia Foundation, Prime Islami Securities, People's Leasing and other institutions.
On the other hand, Nazim Asadul Haque, also owner of Bangla Trac, had his name in the Panama Papers scandal as a money launderer.
In 2018, M Shamsul Islam Varosha, owner of Varosha Match, took up the chairmanship of the company to bring it back to business.
The BSEC said the company was transferred to Category Z on 19 April 2018, but the board of directors did not take any action. They failed to improve the performance of the company during this period.
The commission will also appoint a special auditor to review the financial statements and the affairs of the company.
As per the financial statements 2019, the company sustained an accumulated loss of Tk152.22 crore, which included a net loss of Tk71.80 crore.
The net asset value per share has been reduced to Tk2.85 from Tk7.22.
The current paid-up capital of the leasing and finance company is Tk164.06 crore.
As of July last year, sponsors and directors jointly held 41.88%, institutional investors 11.55%, foreign investors 0.04%, and general investors 46.53% of the company shares.