Hearing held on Ring Shine’s IPO fund

The securities regulator has held a hearing on the utilisation of Ring Shine Textiles Ltd's initial public offering (IPO) fund.

Secretary of Ring Shine Textiles Asraf Ali was present as a representative of the company during the hearing at the Bangladesh Securities and Exchange Commission (BSEC) office yesterday.

He told The Business Standard that, "Our company has repaid Tk22 crore loan to the Premier Bank instead of the Woori Bank. I attended the hearing on behalf of the company and explained the issue."

Before issuing public shares, the textile firm announced that it would use Tk50 crore from its IPO fund to repay Tk28 crore loan taken from an offshore banking unit of the Dhaka Bank, and Tk22 crore to repay a loan taken from South Korea-based Woori Bank.

Ring Shine raised Tk150 crore after its IPO was launched on October 6, 2019. 

However, the company used the IPO fund money to pay off only Tk22 crore loan, taken from the Premier Bank, instead of repaying loans to the aforementioned banks.

The Dhaka branch of Woori Bank requested the Bangladesh Securities and Exchange Commission (BSEC) to intervene and ensure the recovery of its loan. The BSEC issued a letter for the hearing for this reason.

The company used Tk25.53 crore from its IPO fund until December 31, 2019.

Following the BSEC's request on January 27, the Bangladesh Bank froze the Ring Shine's IPO fund.

Along with paying off loans, the textile firm also wanted to use the IPO fund to import machinery worth Tk96.40 crore and spend around Tk3.60 crore on IPO-related expenses.

Meanwhile, Universe Knitting Garments Ltd, a placement holder of the Ring Shine, has expressed its intention to sell off 36.87 lakh Bonus shares out of its total holding of 2.83 crore shares.

Sung Wey Min is the chairman of Universe Knitting Garments Ltd and the managing director and sponsor of Ring Shine Textiles Ltd.