BSEC rejects reappointment of Far East Knitting independent director

The Bangladesh Securities and Exchange Commission (BSEC), citing lack of supporting documents, has cancelled an application of the composite textile manufacturer Far East Knitting and Dyeing Industries seeking reappointment of an independent director on the company's board.

The Far East Knitting had written to the commission in December last year seeking the reappointment of Mohammad Nazrul Islam as an independent director on its board.

According to the company's annual report for 2022-23, its board in October last year extended the term of Nazrul for the next three years from 21 November 2023 to 20 November 2026.

Later, following approving the extension of the independent director's term at its annual general meeting in December, the company wrote to the commission for approval.

On 27 February this year, the BSEC in a letter to the company said after examining the documents, the commission is not in a position to accord consent to reappoint Mohammad Nazrul Islam as independent director of Far East Knitting and Dyeing Industries. 

The letter further stated that the Far East Knitting turned to a non-compliance of two conditions imposed in the corporate governance code, which was issued on 3 June 2018.

However, Md Sorafuzzaman, company secretary of Far East Knitting, told The Business Standard that in response to their application, they have yet to get any letter from the commission regarding the issue.

According to the Far East's financial statements, in the last fiscal FY23, it paid a 10% cash dividend to its shareholders.

The company reported a 92% growth in its profit in the 2022-23 fiscal compared to the previous fiscal.

But in the first two-quarters of the current fiscal year, it incurred a loss owing to an increasing cost of goods sold, and a share loss from Far East Spinning Industries, an associate company. 

In the first half of 2023-24 fiscal, its loss per share stood at Tk0.32. During the same period of the previous fiscal, it had reported earnings per share at Tk0.45.