Appollo Ispat’s debt crosses Tk1,000cr amid no operations

Rani Marka Dheutin manufacturer Appollo Ispat Complex, which was allowed to go public a decade ago despite strong objections from the then finance minister AMA Muhith, has now proved to be a devastating investment for the shareholders.

The Dhaka Stock Exchange (DSE) disclosed on Thursday that the firm's liabilities have surpassed a thousand crore taka and that its factory at Narayanganj has been out of production for the last two years.

The company informed the DSE that its financial liabilities, including penal interest, shot to approximately Tk900 crore while other outside liabilities surged to Tk200 crore.

When it applied to go public to raise Tk216 crore in equity from investors, showing Tk733 crore in total assets and less than Tk400 crore in total liabilities, Tk500 crore in annual sales, Tk35 crore in net profit, and over 400 permanent employees, the late Muhith in a letter in 2013 asked the then BSEC chairman M Khairul Hossain not to let the company raise capital from the public as it committed both loan and tax irregularities.

"The firm has made an arrangement to swindle public money through the initial public offering," his letter read, and the Bangladesh Securities and Exchange Commission did not lend an ear.

And the consequence was clear. Following the listing, the firm posted higher profits for the first three years, but everything started to decline in 2017 after the pre-IPO shares were eligible for sale on the bourses.

Shareholders had been in the dark about the firm's business performance since 2019, as there had been no disclosure after the company posted a net loss of Tk92 crore for fiscal 2018-19.

A sum lost in a year that the company never made in 12 months.

The stock price, which went above Tk40 apiece after the debut, tumbled to below Tk3, and the investors were left with their share of the increasing liabilities amid no income.

TBS, during a visit to the Appollo Ispat factory a year ago, learned only a few security, maintenance, and administrative department employees were left with the company while others had to leave in phases amid no hope for resumption of operations.

The company founded in the 1990s by the late Dhaka Awami League leader and entrepreneur Deen Mohammad was never managed professionally, said a factory employee last year.

The employee blamed Mohammad's several partners and top managers for embezzling the firm's money over the years. Also, neither Mohammad himself nor his family members were found to be serious enough to dig deeper and stop the company's bleeding.

The securities regulator that has interfered with a large number of defunct or sick listed companies since the pandemic, surprisingly, has not appointed any independent directors yet.

Appollo Ispat shares were stuck at the floor price of Tk8.2 on the DSE on Thursday.