Bond investor files petition to wind up Golden Harvest Agro
Golden Harvest Agro, to “expand its business”, issued a Tk50 crore redeemable, non-convertible corporate bond in 2017 through private placements, following the Bangladesh Securities and Exchange Commission’s nod in December 2016
Delta Life Insurance Company has filed a court plea to wind up Golden Harvest Agro PLC to recover its investments in the agro manufacturers bond issued in 2017.
"As all efforts to recover the money failed, our client Delta Life had no other option, as the insurer itself is a publicly listed company and has accountability to its clients and shareholders," petitioner's lawyer Mustafizur Rahman Khan told TBS yesterday.
The high court bench of Justice Khizir Ahmed Chowdhury, on 27 January ordered the petitioner to publish a notice in two newspapers within three weeks and submit a compliance report within 30 days from the date of the notice's publication.
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Golden Harvest Agro, to "expand its business", issued a Tk50 crore redeemable, non-convertible corporate bond in 2017 through private placements, following the Bangladesh Securities and Exchange Commission's nod in December 2016.
Delta Life Chief Financial Officer Milton Bepari told TBS, "We invested Tk10 crore in the Tk50 crore bond where the company promised 10% to 11.5% annual interest alongside gradual redemption of bond units from the end of the second year."
The company failed to pay back from the very beginning of the redemption period and the bond's seven-year tenure expired already. It owes over Tk25 crore to Delta Life and neither legal notices nor Delta's complaints to the securities regulator helped a recovery.
Section 241 and 242 of Companies Act allows lenders or bond investors to file pleas for winding up of a debt defaulter company, said Mustafizur.
If the court, upon hearing both the parties, is satisfied that the bond issuer is unable to pay back, it may appoint a liquidator to sell off the company's assets and use the sale proceeds to pay back the deprived bond holders, lenders.
In 2013, Golden Harvest, a pioneering ready to cook products manufacturer, raised Tk75 crore from the stock market through an initial public offering. Again in 2019, the company raised Tk89.93 crore by issuing right shares.
Having Tk52 crore revenue in 2011, the company grew it to Tk224 crore in six years, which dropped to less than Tk100 crore again in the recent years due to its business decline.
Auditor raised its red flag about the company's surged liabilities and high debt servicing costs already surpassing 36% of the total expenses.
Golden Harvest Company Secretary Mohammad Jafar Ali was not reachable over phone for a comment on the petition.
