Mithun Knitting shares soaring though factory was closed two years
The company also failed to comply with securities rules
Although the factory was closed for nearly two years, share prices of Mithun Knitting and Dyeing – a Bangas Tallu Group company – is soaring abnormally.
The share price of the company, which failed to comply with securities rules, jumped 155% to Tk24.2 a share on Wednesday, from Tk9.5 on 2 June.
Keep updated, follow The Business Standard's Google news channel
The factory stopped production on 20 September 2019 when it failed to comply with conditions of modernisation demanded by international buyers.
Under these circumstances, the company – doing circular knitting, dyeing, finishing, and knit garments for both local and international markets –also failed to disclose its annual and quarterly financials for fiscal years 2018-2019 and 2019-2020.
It has not paid any dividends to shareholders since fiscal 2016-2017.
According to information published on the websites of local stock exchanges, the company was forced to shut down the factory when the Bangladesh Export Processing Zones Authority (Bepza) terminated its lease agreement on 26 February 2019.
Accord and Alliance – two leading international associations of readymade garments buyers – had also placed trade embargoes on Mithun Knitting and Dyeing, pushing it towards closure.
The embargoes were to be lifted only if the firm fulfilled certain conditions such as building an environment-friendly factory, and maintaining safety equipment on its premises.
No progress in resuming operations
The company did not provide any information on Wednesday regarding the factory resuming operations. In response to a query, it informed the Dhaka Stock Exchange (DSE) only of its present status as operational and a pending annual general meeting (AGM).
In its disclosure published on the stock exchanges, the company said its annual accounts for the 2018-2019 and 2019-2020 fiscal years are under process of auditing and that the company will submit a prayer to the High Court for special permission to hold the pending AGM.
The Business Standard contacted Mithun Knitting's company secretary for comments but the official did not receive the phone calls.
Mithun Knitting and Dyeing Ltd started operations in 1991 and got listed on the stock market in 1994.
Its factory is in the Chattogram Export Processing Zone (EPZ) and the firm suffered a loss in fiscal 2016-17, having provided 20% in stock dividends the previous fiscal year.
