The Bangladesh Securities and Exchange Commission (BSEC) has decided to appoint special auditors for four listed companies – Alhaj Textile Mills, Bangladesh Welding Electrodes, Fu-Wang Foods, and Safko Spinning Mills – to probe into their financial statements.
The securities regulator will send quotations in this regard to the panel of auditors this week.
Earlier, the commission restructured the firms' boards in an attempt to improve their businesses, and also to find out the reasons behind their downturn, said BSEC sources.
Alhaj Textile Mills
The BSEC restructured the company's board in December 2020.
Alhaj Textile Mills mainly manufactures cotton yarns and sells its products to local and foreign markets.
Its production remained halted from 25 June 2019 to 1 June 2021.
From July to September of 2021, it made a net profit of Tk7 lakh.
The sponsors and directors of the company hold 25.63% shares of its paid-up capital.
Alhaj Textile Mills Ltd was incorporated on 3 March 1961.
The company was nationalised and its mill was operated under the management of the Bangladesh Textile Mills Corporation in 1972.
But on 12 December 1982, it was denationalised and handed over to its previous owners. The company was then listed on the bourses in 1983.
Bangladesh Welding Electrodes
The commission appointed two independent directors to the company's board in January 2021.
Bangladesh Welding Electrodes Ltd manufactures and markets welding electrodes, industrial glasses, and other allied items.
BSEC observed that the company provided false information about its capital gain on the disposal of its Tk33.24 crore fixed assets.
Besides, the company declared a 1% stock dividend to the shareholders without earning any profit in 2019, which is contrary to the securities laws.
Currently, the company needs fresh capital to start operations in relocated facilities.
It was incorporated in 1983 and was listed on the Dhaka Stock Exchange in 1999.
BSEC recast its board in July 2021 and nominated five independent directors for the company to protect investors' interests.
The commission found that the company made huge transactions with related parties and family members without making proper disclosures to the stock market.
Fu-Wang Foods Ltd got listed on the stock exchanges in 2000.
Safko Spinning Mills
Its board was recast in September 2021.
The stock market regulator nominated four independent directors for the company.
It declared no dividend for the 2018-19 and 2019-20 financial years. Since listing, the company increased its paid-up capital by 87.39% by giving out bonus shares.
Safko Spinning Mills Ltd went into commercial production in 1997 and got listed on stock exchanges in 2000.