Minori Bangladesh yet to get Emerald Oil’s ownership as banks hold sponsor shares

Minori Bangladesh Limited, an arm of the Japanese farming group Minori Co Limited, could not yet get hold of Emerald Oil Industries Limited as the oil company's shares owned by its sponsors have been mortgaged against bank loans.

The Japanese venture brought the Spondon rice bran oil company into operation with a fresh investment of Tk30 crore in January this year, and it is supposed to be given 30% shares of sponsors and directors against the investment, amounting to around Tk50 crore.

Because of not having majority shares in its control, the company now cannot apply to the Registrar of Joint Stock Companies and Firms for a change of ownership.

In this situation, to take control of the listed company, Minori Bangladesh has sought the opinion of the stock market regulator, Bangladesh Securities and Exchange Commission (BSEC), over issuing shares against its investment.

Minori Bangladesh, whose operations are based in Tangail, focuses mainly on organic crops, including rice, vegetables and fruits. Last year, it took over the non-performing Emerald Oil.

In March 2021, the BSEC restructured the board of Emerald Oil by appointing five independent directors in a bid to bring it back to business.

Later, two directors were appointed from among shareholders having at least 2% of shares of the paid-up capital of the company.

Minori Bangladesh also bought another 8% share of Emerald Oil from the capital market and appointed two representatives in the company's board.

Md Afzal Hossain, managing director of Emerald Oil board, told The Business Standard that complexities over the handover of the company's shares owned by its sponsors will be over by this year.

To help Emerald Oil turn around, Minori Bangladesh has so far injected Tk30 crore into it as working capital, other than taking care of the company's liabilities with BASIC Bank and Bank Asia, which crossed the Tk100 crore mark with interests, as per an agreement with the oil company's main sponsor Syed Hasibul Gani Galib, who fled the country after facing a corruption trial due to his scam in taking loans from BASIC Bank.

Hasibul Gani Galib took out bank loans against 1.12 crore out of his 1.28 crore shares in the company. As the main sponsor is now absconding, the banks are currently holding his shares. That is why Minori Bangladesh has not yet got Emerald Oil's ownership, according to company sources.

Two other sponsors – Syed Monwarul Islam and Md Enamul Haque Khan – have shares of 12.1 lakh and 3.17 lakh in the company respectively.

According to Emerald Oil, it also has three shareholder directors who hold more than 2% each.

As of August data, sponsor-directors and Minori Bangladesh together have 38.26% stakes in the company, while general and organisational investors own 61.76% shares.

Emerald Oil Industries Ltd is the producer of the almost forgotten Spondon branded rice bran oil.

It was incorporated in 2008, began production of its Spondon-branded rice bran oil in 2011 and entered the bourses in 2014. The company raised Tk20 crore issuing two crore general shares at face value of Tk10.

But in a few years, it went into meltdown both in its business and in the stock market as soon as the founder's loan scams were exposed, and became non-operative in 2017.