Regulator recasts board of ill-performing FAS Finance

Jan-Sep 2019 financials

• Revenue loss was Tk119.58cr
• Investment income Tk1.65cr
• Net loss Tk127.34cr
• Loss per share Tk8.54
• Failed to declare any cash dividend since listing

In order to protect the interests of investors, the Bangladesh Securities and Exchange Commission (BSEC) has restructured the board of directors of the ill-performing non-bank financial institution - FAS Finance and Investment Limited.

Earlier, the stock market regulator appointed A Wahab & Co chartered accountants as a special auditor to audit the company's financial statements for the year that ended on 31 December, 2019.

The commission has nominated five independent directors, while two directors will be nominated from among the shareholders who hold a minimum of 2% share of the company's paid-up capital.

It has also proposed that independent Director Mohammed Nurul Amin, former managing director of NCC Bank and Meghna Bank Ltd, be selected as chairman of the company.

Other independent directors are Mohammed Saifuddin Khan, associate professor at Dhaka University; Barrister General Abu Sayed Mohammad Ali; Dr Syed Abdulla Al Mamun, deputy CEO of Credit Rating Information & Services Limited; and Mohammad Salim, faculty member of the Bangladesh Institute of Capital Market.

The existing independent directors will not be eligible to retain the position.

According to BSEC, sponsors and directors of the company jointly hold 13.20% share of the paid-up capital and thus failed to comply with the 30% shareholding rules of the commission.

FAS Finance and Investment Limited was supposed to reshape its board within 45 working days as per the rules, but the company failed to comply with the regulation.

The company did not declare any cash dividend since its listing.

FAS Finance's reserves and surplus stood at minus Tk120.28 crore, after adding Tk16.20 crore as revaluation reserves.

The auditor informed that the company's classified or non-performing loans (NPLs) stood at Tk1,311 crore for 2019, which is 73% of the company's total loan advance and lease investment.

The company's margin loan balance with negative equity was Tk157.8 crore as of 31 December, 2019.

In 2019, the company's revenue was Tk175.18 crore and its net loss stood at Tk146.47 crore.

The company was listed on the stock exchanges in 2008. As of April 2021, sponsors and directors hold 13.2%, institutions 11.17%, and general investors 75.63% shares of the company.

The last trading price of FAS Finance shares on the Dhaka Stock Exchange was Tk5.70 each on Monday.

FAS Finance and Investment Limited provides lease financing, transport financing, term financing, project financing, house financing, SME financing, and service sector financing.