Capital market investors oppose Far Chemical, SF Textile merger

Bangladesh Capital Market Investors Association has called on the Bangladesh Securities and Exchange Commission (BSEC) to stop the merger between Far Chemical and SF Textile.

The association's General Secretary Kazi Abdur Razzak made the call in a letter to the BSEC chairman, saying that Far Chemical is struggling financially.

"In 2014, when the company was listed on the capital market it showed its earnings per share at Tk5.01. However, at the end of 2021, its loss per share was Tk0.16. From 2014 to 2017, the company manipulated the share price by showing a higher profit. During this period, the directors of the company sold their shares and took away Tk81 crore," read the letter.

The investors association thinks that through the merger with SF Textiles, Far Chemical will increase the number of shares and, by showing fake earnings per share, it will increase the share price and loot money from the capital market through manipulation. As a result, investors will suffer once again.

Other than the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE), the investors' body also informed the Prime Minister's Office, the Financial Institutions Division of the Ministry of Finance, the Anti-Corruption Commission (ACC), the Directorate General of Forces Intelligence and the National Security Intelligence (NSI) about the status of Far Chemical.

The letter added that Far Chemical had a total of 9 crore shares at the time it was listed in the capital market. The current number of shares of the company is 21.80 crore. The number of shares has been doubled with stock dividends after listing.

Meanwhile, Shirazul Haque, managing director of Far Chemical, did not respond to a request for comment.

In November last year, Far Chemical Industries decided to merge with SF Textile Industries Limited, a non-listed public limited firm, subject to the approval of shareholders and relevant authorities.

The board of directors of the company also decided to shift its factory from Cumilla EPZ to its premises at Rupganj, Narayanganj.

Far Chemical Industries is a concern of Far Group.  The Group was established in 1993 based on a 100% export-oriented Sweater Industry.

The group has two other firms- ML Dyeing and RN Spinning Mills which were also listed in the capital market.

The last trading price for shares of Far Chemical on the Dhaka stock exchange was Tk12.50 on Monday.