BSEC to probe into status of 7 firms failing to submit financials

Infographics: TBS

The Bangladesh Securities and Exchange Commission (BSEC) will inspect the overall business status of seven companies which did not submit their financial statements for the last few years.

It has formed seven separate committees to inspect the current operational status of those firms. 

The companies are Fareast Islami Life Insurance, Delta Life Insurance, Phoenix Finance, Prime Finance, Stylecraft Limited, MIDAS Financing and Newline Clothings Limited.

Besides, the BSEC committees will inspect their profitability and related issues. 

The teams will also try to find out the reasons for not submitting the audited and unaudited financial statements to the commission for the last few years. 

They will also find out if there is any problem in the management of the firms alongside assessing the growing concerns surrounding them, future sustainability and other related matters. 

The inspection teams will complete the inspection within 30 working days and submit reports to the commission.

The unavailability of the financial statements for the last few years has kept the investors in the dark. They have poured money into these companies without having a clear understanding of their overall status, a number of BSEC officials said, requesting anonymity. 

Additionally, the companies have failed to pay dividends and provide expected capital returns, leaving investors disappointed, they added.

Of these seven firms, Newline Clothings and Stylecraft are manufacturing companies.

Newline Clothings, a 100% export-oriented textile industry, was listed on the stock exchange in 2019. Within four years, the company shifted to the 'Z' category from the 'A' category. Even, it has failed to arrange an AGM for the last few years.

After the January-March quarter of FY22, the company did not publish any quarterly disclosure also. The company last declared a 12% cash dividend in FY21. 

Its shareholders are in a dark as they did not get any updates about the company's performance because of its failure to submit financial reports.  

Listed in 1983, Stylecraft Limited share are trading in the 'B' category. In the October to December quarter of FY23, the company made a loss of Tk0.67 per share. 

Midas Financing Ltd began its operation as an NBFI at the end of 1999, and it got listed on local bourses in the early 2000s.

However, the NBFI declared only a 7.5% cash dividend since its listing.  The firm raised its paid-up capital through stock dividends. 

In July-September quarter of FY23, its consolidated loss per share stood at Tk0.85, representing an increase over Tk0.66 loss during the same period of the previous year.

Phoenix Finance and Investments was listed on the stock exchange in 2007. The company last declared a 6% cash dividend for its shareholders in 2019. However, the company could not arrange AGM for the past few years.

In July-September quarter of FY23, the company's loss per share stood at Tk9.60, up from Tk1.51 loss in the previous fiscal's same period. 

Prime Finance and Investment also declared its last dividend of 2% for its shareholders in 2019. However, the company's shares have traded in the 'Z' category from the 'B' category since February this year.