Stock Exchanges to investigate RN Spinning and Family Tex

Both the bourses – Dhaka Stocks Exchange and Chittagong Stock Exchange – will investigate the whole affairs of R N Spinning Mills Ltd and Family Tex (BD) Ltd, including all its offices and factory premises.

As per the recent directive of the Bangladesh Securities and Exchange Commission (BSEC), the stock exchanges will inspect these companies which are listed on the capital market.

A top official of Dhaka Stock Exchange said, "We received the commission's directive on Wednesday regarding the matter. We have also formed a committee to investigate those companies according to the regulator's instructions."

The bourses will report to the securities regulator within seven working days of this directive being issued.

RN Spinning Mills

All production of the RN Spinning Mills Ltd was halted since last year after a fire gutted its factory.

The auditors of the company, in their report, said the company's net loss stood at Tk612 crore at the end of the 2018-19 financial year.

"The company suffered a huge loss due to the fire in the factory. For this, there is significant doubt about the company's ability to conduct its activities as a going concern," the auditors said.

Meanwhile, the company has reduced its paid up share capital to Tk56.07 crore from Tk392.54 crore.

RN Spinning Mills Ltd Company Secretary Hannan Molla told The Business Standard, "We reduced the paid up capital to retrench the company's existing liabilities."

"We, in a meeting held recently, got shareholders' approval to collect funds from other sources to resume the company's production," he said.

On Wednesday, the price of RN Spinning Mills Ltd's shares closed at Tk4.10 at the Dhaka Stock Exchange (DSE). The company was listed on the DSE in 2010.

The company incurred a net loss of Tk32.75 crore in three quarters of the last financial year.

Sponsors and directors of the company hold 30 percent shares out of the total shares, while institutional investors 12.82 percent, foreign investors 0.03 percent and general investors hold 57.15 percent shares.

Family Tex

In 2013, Family Tex raised capital of Tk34 crore at a face value of Tk10 per share through initial public offering (IPO). The company raised the capital to repay high interest bank loans.

The company has been at a loss for three consecutive years. For this, the company did not pay any dividends to investors last year. It also made a nominal profit in the first half of the 2019-20 financial year.

The price of its shares closed at Tk3.10 on Wednesday at DSE and its paid up capital is Tk354.16 crore.

Most of the directors of the company have sold their shares. Now, they hold only 4.02 percent out of total shares while general shareholders of the company hold 77.57 percent shares.