DSE was unaware of Northern Jute closure for years
International Leasing and Financial Services stated that it was unable to recover its loan from Northern Jute due to the sponsor-directors going into hiding.
Northern Jute Manufacturing Company has been out of production for years, but the Dhaka Stock Exchange (DSE), the primary stock market regulator, has recently become aware of the dire condition of this publicly listed yarn and twin producer.
During an inspection, the DSE found that the factory premises were completely closed, the country's premier bourse said in a disclosure on its website on Tuesday.
According to officials at the Bangladesh Small and Cottage Industries Corporation (BSCIC) in Kushtia, where the factory is located, it had been closed prior to the Covid pandemic because the board of directors had gone into hiding.
They added that it operated partially during the pandemic before eventually shutting down entirely.
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International Leasing and Financial Services stated that it was unable to recover its loan from Northern Jute due to the sponsor-directors going into hiding.
Md Ashanuzzaman, deputy general manager (in charge) of the BSCIC district office in Kushtia, told The Business Standard, "Only an official is working in the company, and board members are not available at this moment. So that we cannot communicate with its high officials."
"The BSCIC has outstanding dues of around Tk27-30 lakh in service charges and land fees," he added.
According to the latest available annual report for 2019-20, the board of Northern Jute included Uzzal Kumar Nandi as chairman, Ananga Mohan Roy as managing director, and Avitav Adhikary as the nominee director from Earthscope.
The trio, who collectively held 28.12% of the company's shares, were also partners with the much-discussed PK Halder.
Northern Jute owes Tk46cr loan to International Leasing
Northern Jute Manufacturing took a Tk30 crore loan from the scam-hit non-bank financial institution in 2015.
The loan, including interest, swelled to Tk46.84 crore as of December 2022.
Officials of International Leasing stated that the new management, reconstituted by the High Court, is making efforts to recover the loan, but they have been unsuccessful so far as the management of the company cannot be communicated.
They said now that International Leasing's present board is trying to resume the factory by injecting fresh funds, they also requested the High Court reconstruct its board.
Share and financial information
Listed in 1994, the company's paid-up capital is Tk21.14 crore.
Out of the total shares, existing public shareholders held 84.9% and sponsor-directors held 15.09% of the company.
Northern Jute has kept its shareholders in the dark since October 2020, when it failed to publish any financials.
According to its website, the company posted Tk2.42 crore in net profit.
After that, the company published the first quarter financials of fiscal 2020-21.
During the July-September quarter, its revenue dropped by 49% to Tk8.96 crore, and the company incurred a loss of Tk1.33 crore.
At the same time of the previous fiscal year, its revenue was Tk17 crore and its profit was Tk1.53 crore.
According to its website, Northern Jute has set up a modern jute yarn and twine manufacturing plant with 2,433 spindles on 5.5 acres of land at BSCIC Industrial Estate, Kushtia.
The production capacity of 7,500 tonnes based on three shifts per day.
The machinery and equipment for the project have been imported from the United Kingdom, Germany, India, and China.
The company has two units for producing heavy and light-count yarn. It was used to export its products to European countries, including Turkey, Japan, Hong Kong, Poland, Russia, Bulgaria, India, China, and Australia.
