Envoy Textiles gears up for AGM as conflict among sponsors is over

Envoy Textiles Limited is now gearing up to hold its pending annual general meeting (AGM), as the conflict between its two major owners, Kutubuddin Ahmed and Abdus Salam Murshedy, has finally come to an end. 

In its verdict, the High Court on 10 April reconstituted the board of the company and asked it to hold the AGM within the next 90 days, Envoy Textiles said in a Dhaka Stock Exchange (DSE) filing.

As per the High Court order, Kutubuddin Ahmed will be on the board as its chairman, Independent Director Kazi Anowarul Hoque will be its vice chairman, and Shafiqur Rahman will be an independent director.

Tanvir Ahmed will serve as its managing director, and Shehrin Salam Oishee will be the deputy managing director.

Other board members include independent directors Fakhrudin Ahmed and Syed Shahed Reza, shareholder directors Abdus Salam Murshedy, Rashida Ahmed, Sharmin Salam, Sumayyah Ahmed, and Ishmam Salam.

In June last year, Salam Murshedy filed the case challenging some amendments in the company's articles of association, the appointment of three additional board members, an independent director and a meeting notice.

Saiful Islam Chowdhury, company secretary of Envoy Textiles, told The Business Standard, "We got the court's verdict on 10 April. Now, we have to arrange the AGM within the next 90 days."

Kutubuddin Ahmed said, "We will convene a board meeting on 18 April to fix the AGM date for FY22."

He further said that the upcoming AGM will decide how the company will run in the future.

Earlier, in September 2022, the High Court reconstituted the board of directors of Envoy Textiles and appointed retired justice Moyeenul Islam Chowdhury as its chairman for an interim period until the shareholders of the leading denim manufacturers are able to resolve their disputes.

According to the company's statement, sponsor-director Kutubuddin Ahmed and his family hold 34.06% of the company's shares, and Abdus Salam Murshedy's family and their associate companies own 23.87%.

The legal battle over supremacy at Envoy Textiles Limited, which is the world's very first LEED-certified platinum denim mill, started after the separation of Kutubuddin Ahmed from Envoy Textiles' parent company, Envoy Group.

Kutubuddin's separation from Envoy Group

On 9 March 2022, Envoy Group's founder Kutubuddin Ahmed left the business group after handing over its ownership to his business partner Abdus Salam Murshedy.

They, however, agreed on running the group's flagship company – Envoy Textiles – independently.

In the meantime, after leaving the Envoy Group, Kutubuddin and his family increased their holdings in Envoy Textiles.

According to DSE data, in a single day of March, Kutubuddin Ahmed, his son Tanvir Ahmed, and his daughter Sumayyah Ahmed bought 2.61%, 7.12%, and 2.61% shares, respectively, from other institutional investors.

At that time, Abdus Salam Murshedy told The Business Standard, "I do not see any problem with Kutubuddin Ahmed and his family members' increasing holdings in Envoy Textiles."

He mentioned that Kutubuddin got a lot of money by handing over ownership of Envoy Group, and he is investing that money in the listed textile company.

At present, Kutubuddin, his family members, and their business entities own over 50% of the company, while Abdus Salam Murshedy, his family members, and their business entities own over 20%.

Currently, Envoy Textiles' paid-up capital is Tk167.73 crore. The company raised Tk90 crore from the capital market by issuing 30 crore shares in 2012 to expand its business.

Envoy Group, which started its journey in 1984 with a business in the garment sector, now has 40 companies. In all, these companies have an annual turnover of more than $400 million.