Three pharma companies ordered to repay intercompany loans
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MONDAY, FEBRUARY 06, 2023
Three pharma companies ordered to repay intercompany loans

Stocks

Salah Uddin Mahmud
21 December, 2020, 10:35 pm
Last modified: 21 December, 2020, 10:36 pm

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Three pharma companies ordered to repay intercompany loans

The regulator also asked them to explain their non-compliance

Salah Uddin Mahmud
21 December, 2020, 10:35 pm
Last modified: 21 December, 2020, 10:36 pm
Representational image. Picture: Collected
Representational image. Picture: Collected

The Bangladesh Securities and Exchange Commission (BSEC) recently ordered Orion Pharma, Orion Infusion and Active Fine Chemicals Ltd to explain their non-compliance to rules for intercompany loans.

The regulator has also asked them to return those loans along with accrued interest from sister or associate companies within 15 days.

According to the BSEC, Orion Pharma has provided Tk529 crore in loans to its sister companies without charging any interest income on the fund while the listed company itself is bearing Tk9.53 crore in interests against its total bank loans of Tk701 crore, as of 31 March, 2020.

The capital market regulator in its letter on 20 December said the intercompany loans contradict with the Commission's 2006 notification which aimed at curbing intercompany loans by listed companies that might deprive public shareholders.

Orion Infusion Ltd, another listed company of Orion Group provided Tk6.37 crore to its associate company Orion Pharma Ltd and did not charge any interest over the last five years.

Both the companies got 15 days to explain their positions along with justification and reverse the loans charging interest for the last five years.

On the other hand, Active Fine Chemicals lent AFC Health Ltd, a company connected to the same sponsor-directors, Tk10.51 crore as a short term loan. It charged 15% interest, but gave a waiver for the first two years, which also contradicts with BSEC notification.

In a letter on 13 December, BSEC asked for explanation and also ordered the company to repay the entire loan with accrued interest at borrowing rate.

Economy / Top News

Orion Pharma / pharmaceutical companies / Intercompany Loans

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