BSEC to act against Alhaj Textile’s MD for providing false information

The stock market regulator is going to take action against Md Bakhtertiar Rahman, the managing director (MD) at Alhaj Textile Mills Ltd, for providing false information to the bourses. 

In a recent meeting, the Bangladesh Securities and Exchange Commission (BSEC) also decided to take action against the Dhaka Stock Exchange (DSE) official responsible for posting false information about Alhaj Textile's board reform on the DSE website without verifying.  

According to BSEC sources, Alhaj's MD has violated a number of laws and provided information about the company that are misleading. 

In the company's board of directors' meeting, Rahman discussed undisclosed price sensitive information in front of an unauthorised person who is not a director of the company. 

To the stock exchanges, he provided false information about the company's board meeting. 

Also, Rahman provided false information about monthly shareholding. The documents related to shareholding were supposed to be signed by the company secretary, but they were signed by the MD. 

The BSEC deems that the company's shareholders are being misled. It wants to nominate two new independent directors at Alhaj's board. 

The Business Standard contacted Rahman but he declined to comment on the issue. 

Earlier, the commission removed three of the company's five independent directors including its Chairman Khondoker Kamaluzzaman.

The two other removed independent directors are MD Zikrul Hoque and AFM Abdul Moyeen.

Syed Tariquzzaman, retired executive director at Bangladesh Bank, and Novartis Bangladesh Chief Financial Officer Fahmid Wasik Ali were appointed as independent directors at Alhaj. 

Two other independent directors — Bangladesh Academy for Securities Markets' Senior Faculty Member Md Selim, and Dhaka University's Associate Professor of Finance Dr Muhammad Saifuddin Khan — are to stay at the board with their assignment to bring the company back on track.

Amid internal conflicts among the directors from the sponsor family, the company's board, under the chairmanship of independent director Khondoker Kamaluzzaman, went divided earlier this year over how much to bargain or fight with the lender in settling default loans alongside many other issues regarding control over the management.

Alhaj Textile has been contesting a money loan court case filed by its lender Agrani Bank for years. Due to the defaulted loan, it cannot open a letter of credit (LC) to import raw materials. And the complexities dragged the asset-heavy company into either losses or poor profits.

The company was incorporated in 1961. In 1972, the government nationalised it and entrusted its management to Bangladesh Textile Mills Corporation (BTMC).

In 1982, Alhaj Textile was privatised and handed over to its previous owners and in 1983, it was listed on the bourses. 

Alhaj Textile shares closed 1.89% lower at Tk186.90 on the DSE on Sunday.

From July to March of FY23, the company's revenue stood at Tk30.18 crore, which was Tk28.49 crore in the same period of the previous year.

Its net loss stood at Tk0.34 crore, which was Tk0.67 crore net profit a year ago.

As of 31 July 2023, the sponsors and directors jointly held 25.63%, institutions 19.73%, and the general public 54.63% shares of the company.