Mir Akhter under BSEC scanner over fund utilisation

Mir Akhter Hossain Limited, a local real estate company, is under scrutiny of The Bangladesh Securities and Exchange Commission for a Tk332 crore expenditure, the money it earned through issuing initial public offering (IPO) and zero-coupon bonds. 

The regulator formed a three-member inspection committee in late February to review the expenditure, sources at BSEC said. 

Md Faruque Hossain, BSEC additional director, is the convener of the committee, while Deputy Director Md Shahnows and Assistant Director Md Ariful Islam are the members of the committee.

The committee is supposed to complete the review and submit a report to the commission within 30 working days.

Mohammad Rezaul Karim, BSEC executive director, told the Business Standard, "A committee has been formed against Mir Akhter Hossain Limited to examine its IPO and Zero-coupon Bonds proceeds utilisation."

After getting the report from the committee, the commission will take necessary action in this regard, he added.

The company sources requesting anonymity said they sent related documents to the commission after receiving a letter from it to this end. 

In November 2020, the commission allowed Mir Akhter to raise Tk125 crore through an IPO under the book-building method to expand its business, purchase equipment, and repay bank loans. 

The cut-off price of Mir Akhter shares was set at Tk60 each after the bidding.

The IPO fund was supposed to be used within 18 months. However, the construction and engineering firm completed IPO proceeds within September last year.

In March 2022, the company was allowed to issue zero coupon bond worth Tk249.90 crore to refinance debt and enhance the capital base.  The issue price of was Tk207.17 crore 

In July to December 2023, the revenue of the company dropped by 26% to Tk96.46 crore from Tk130.88 crore in the same period a year earlier. 

During the year, its net profit after tax dropped by 24% to Tk9.68 crore from Tk12.80 crore one year ago.

In the first six months of FY24, its earnings per share was Tk0.80 and its net asset value per share stood at Tk50.59.

As of 31 January 2024, the company sponsors and directors jointly held 48.58% shares, institutions 4.26%, and general investors 47.16%.

Its share price closed at Tk45.50 on the Dhaka Stock Exchange on Tuesday.

In 2022-23 fiscal year, Mir Akhter had 33 ongoing projects worth Tk9,268 crore, according to its annual report. 

Current projects include Dhaka-Sylhet national highway, development of Shah Amanat International Airport, construction of a bridge over the Paira River, and some road projects across the country.

Despite a decline in the company's business performance since its stock market listing in 2021, Mir Akhter has a bright future as it secured many government projects, according to market insiders.

In the annual report, the company stated that the construction sector is benefiting from an increase in capital allocation from the government's annual development budget.

It also cited challenges like trade barriers, appreciation of the dollar, and high energy prices in addition to the Russia-Ukraine war that the country is going through. 

Sohela Hossain, chairperson of Mir Akhter, said in the annual report, "Amid these challenges, Mir Akhter was able to run the business with a certain level of efficiency and we worked to retain the company's profitability. We undertook several precautionary measures to deal with the possible adverse impact on business."