Jute Spinners under BSEC scanner
The Bangladesh Securities and Exchange Commission (BSEC) will review the unusual price hike of Jute Spinners Limited, along with the latest operational status of the company.
Recently, the commission has formed an inquiry team in this regard. The committee will visit the factory also which is situated at BSCIC Industrial Estate, Shiromoni, Khulna.
BSEC director Md Abul Kalam, Assistant Director Rezaun Nur Mehedi, and Md Abdul Baten are the members of the inquiry committee.
On 18 April this year, the share price of the company stood at Tk214.4. but one later, on 25 May its share price stood at Tk445.9 unusually. Within a month its share price rose by 108% without any reason. Now, the last closing price of the company stood at Tk417.10 on Sunday.
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An official of the BSEC said, seeking anonymity, in September last year, the company announced that the firm started trial production after the successful completion of renovation and maintenance of pieces of machinery. Within 11 months after the announcement, the company was not able to start commercial production yet.
But the share price of the company rose unusually without any price-sensitive information, he added.
He said the commission will find out the reason why the share price of the company rises unusually as the production is closed. It also traces any manipulation of the share of the company.
The inquiry team also will visit the factory to see the real picture of the company about production and overall situation, he further added.
Officials of the company said seeking anonymity, the company is almost ready for commercial operation but some barriers including a lack of skilled manpower it could not run yet. They expected that it would be resolved within a few months, they added.
He said the commission wanted to visit the company's factory last month but it hasn't been possible yet. Perhaps, they will come this month to see the overall situation of the factory.
They do not know why the share price of the company has increased. It is also a low paid-up company and the number of shares is very little. Stock exchange and regulator is capable of finding out at any time who manipulates the company's shares, they further added.
officials said it is true that the company is struggling to come back into business. its owners are hoping for a turnaround and the resumption of production activities, even if on a small scale.
If the company can start commercial production, it is possible to export properly, officials also added.
The debt-laden company, known as the country's first private jute mill, started trial production in September last year to strengthen its balance sheet after acute financial hurdles forced a production halt in June 2016. The company completed its renovation of 2 raw jute godowns out of 3 and the maintenance of pieces of machinery also. But it cannot start commercial operation yet.
From January to March 2023, the net loss of the company stood at Tk1.84 crore, which was a Tk6 crore loss in the period of July to March of the last fiscal year.
In the January to March quarter, its loss per share stood at Tk10.83 and its net asset value per share was Tk473.45 negative.
According to a regular auditor's report in June 2022, the liabilities of the company stood at Tk77.32 crore which exceeded its total assets of Tk29.70 crore by Tk47.62 crore.
The company rescheduled Tk50 crore loans from Janata Bank, extending the repayment deadline by ten years. It has repaid Tk2-3 crore in other loans, said the company officials.
Jute Spinners has renovated two of its three warehouses, acquired new equipment, and taken maintenance steps for older capital goods as part of steps to resume activities. However, its once strong presence in the lucrative jute yarn markets of Turkey, Japan, and the UK is long gone, which will be very difficult to recover, according to the company.
Its paid-up capital is Tk1.7 crore. As of 31 May 2023, the sponsors and directors jointly held 39.82% shares, institutions 23.20%, and the general public held 36.98% shares of the company.
