BSEC probe of Oimex Electrode
The BSEC will soon form an inquiry committee
The Bangladesh Securities and Exchange Commission (BSEC) is going to investigate the financials and overall business of Oimex Electrode Ltd – a publicly listed manufacturer of welding electrodes, galvanised iron wire, copper coated welding wire, and iron nails.
The regulator will soon form an inquiry committee in this regard, according to sources.
Recently, the BSEC approved a proposal from SS Steel entrepreneurs to acquire 30% shares of Oimex, conditions applying, to become its sponsor-director.
Currently, the sponsors and directors of Oimex jointly hold 30.01% of its shares.
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According to sources, Oimex Founder MA Maleque, who heads the company's factory operations, finds it better to exit, considering the company's poor management and marketing.
Sources also said Maleque, father to a young daughter, is not confident about his succession.
Meanwhile, SS Steel owners, already in the metal business, found the factory of Oimex efficient enough to manufacture quality products at a minimum cost.
They also plan to make further investments in the business, over and above the cost of acquisition at face value, and to regularise the company's bank loans.
Oimex Electrode has a head office in Dhaka and a factory in Kushtia. It went public for Tk15 crore in 2017 by issuing shares at a face value of Tk10 each.
The company used the funds to expand its manufacturing, and research and development capacity.
But its marketing and management did not get any better as its main market has been mostly limited to the north and southwestern parts of the country.
Its revenues and net profits showed upward movement till 2019, but after that, they started to decline.
The company has not declared any cash dividends since its listing.
A Dhaka Stock Exchange (DSE) inspection report in January 2021 revealed the company was overstating its revenues and assets, while its managing director admitted to DSE officials that his company was lacking in proper maintenance of documents.
However, the company's statutory auditor, Artisan Chartered Accountants did not raise any point in this regard, which was a violation of auditing standards, the DSE said in its report to the BSEC back then.
From January to March 2022, the company's revenues stood at Tk26 lakh, which was Tk12.22 crore in the same quarter of 2021.
During the period, it incurred a net loss of Tk2.70 crore and its loss per share stood at Tk0.40.
Oimex Electrode's paid-up capital is over Tk67 crore now, while institutional investors hold 30.91%, and general investors 39.08% of company shares.
The company's DSE shares last closed 1.12% lower at Tk18.8 on Tuesday, compared to the previous trading session.
