Khulna Printing's share price surges 260% in two months

Infographics: TBS

The share price of non-operational Khulna Printing & Packaging Limited, a concern of the Lockpur Group, jumped by a whopping 260% in two months after the group's owner, who had fled the country two years ago, showed up this October.

Khulna Printing's Chairman SM Amzad Hossain, who is also the former chairman of South Bangla Agriculture and Commerce (SBAC) Bank, had escaped the country in 2021 even after the Anti-Corruption Commission (ACC) imposed travel ban because of his misappropriation of funds.

He returned in October this year and since then, Khulna Printing's share price has been skyrocketing despite the company being non-operational for the last three years.

Khulna Printing's shares, in the first week of October 2023, were trading below the face value of Tk10 each. Then they shot up as high as Tk33 apiece in the first week of December. On Tuesday, the share price slightly came down to Tk31.5 on the Dhaka Stock Exchange.

Mohammad Rezaul Karim, executive director of the Bangladesh Securities and Exchange Commission (BSEC), said the commission directed the Dhaka bourse to investigate the unusual surge in the share price of Khulna Printing.

The stock exchange is yet to submit its findings to the BSEC. If any anomaly is found, the commission will take necessary action, he added.

Market insiders said rumours about changes in the company's ownership and the factory's reopening are what caused this abnormal hike in its share price.

Besides, cautious investors have recently shown a buying appetite for stocks of small-cap companies, while blue-chip and large-cap stocks are stuck at their floor prices.

SM Amzad Hossain told TBS, "The company was compelled to close down operations because its bank accounts were frozen. As the factory has been closed for three years, no employee except the security guard is working there."

"We hold a 40% stake in the company and do not want to let go of this portion. We are trying to unfreeze all accounts of our group so that we can resume operations. This will take time," he added.

Earlier following a court order, the authorities froze 933 bank accounts linked to SM Amzad Hossain based on embezzlement charges against him, his wife and daughter. Of these accounts, 740 were opened with SBAC Bank, according to sources.

According to the ACC probe, Amzad embezzled nearly Tk80 crore through accounts of his various companies.

Back in 2014, Khulna Printing raised Tk40 crore from the stock market for business expansion. It has been knee-deep in losses for five straight years till the fiscal 2021-22. It also incurred a loss in the July to December period of the 2022-23 fiscal year.

Owing to losses, the company failed to declare any dividend after 2020.

According to the BSEC, Khulna Printing's turnover fell drastically in FY21, but costs increased a suspicious lot. Also, its financial statements did not represent the true situation of its business, the regulator deemed.