Regulator freezes Shurwid insiders’ BO accounts 

The Bangladesh Securities and Exchange Commission (BSEC) has ordered a freeze of all types of securities in the beneficiary owner's accounts of Shurwid Industries top insiders after it observed that the company had submitted a false dividend disbursement report.

In a directive on Tuesday, the BSEC asked the Central Depository Bangladesh Ltd and its depository participants to freeze all types of securities in BO accounts directly or indirectly owned by the sponsors, directors, managing director, chief executive officer, chief financial officer and company secretary of Shurwid Industries Ltd until further order.

Stock exchanges have been directed to investigate the entire affairs of the company, inspect its offices and factory premises, and submit reports to the regulator within seven working days.

The securities regulator is also going to appoint a special auditor to deeply scrutinise the accounts and disclosures of the company.

On January 29, the company reported that it had already disbursed all the cash dividend warrants for the fiscal year that ended on June 30, 2019.

Later, a number of shareholders complained to the regulator that they did not receive any dividend, and the regulator found it to be true.

There is a widespread malpractice nowadays where some listed companies send cash dividend warrants through courier services and the courier firms somehow do not deliver these to the investors. Investors keep knocking for their dividend and suffer delays.

The Business Standard called Shurwid Industries Chairman Engineer Mahmudul Hasan, but he did not answer.

The company, listed on both the stock exchanges in 2014, has been creating hardship for its shareholders since the beginning.

The manufacturer of one-time cup, plate and foil products has been off production for more than a year after a disruption in utility services. At that time, its sponsors and directors got into an internal clash over grabbing control of the board and the management.

Meanwhile, the internal grouping ended after one group had opted out by selling off their stake. The company returned to production, entered into some contracts with IT-based service providers to diversify sources of income, and also posted net profit after taxes.

But investors still remember the deceiving behaviour by the company people regarding arrangement of shareholders' general meeting in inconvenient places and at odd times like 8am.

The company of Tk57.37 crore paid-up capital posted Tk0.37 earnings per share for the 2018-19 fiscal year and declared 10 percent cash dividends.

It also posted an EPS of Tk1.89 for the first nine months of the 2019-20 fiscal year, while its net asset value per share stood at Tk14.11 as of March 31, 2020.

However, the special auditor will investigate if the rise in income and assets are genuine or fake.

Shurwid shares at the Dhaka Stock Exchange rose by more than 300 percent in two years till the first quarter of 2019. Now it is hovering around Tk21, halving from its last peak.

Last month the company informed the stock exchanges that their factory had been closed since late March because of the Covid-19 pandemic.

Sponsors and directors now hold only 12.01 percent shares, while institutional investors have 21.96 percent and the remaining 66.03 percent shares are in the hands of the general public.