Raised Tk25cr without BSEC consent: Al-Amin Chemicals now gets post-facto approval

Infographic: TBS

Al-Amin Chemicals Industries — a firm that was relegated to stock exchange's OTC platform — has secured a post-facto approval for raising a Tk25-crore capital through issuing new shares that required stock market regulator's prior consent.

Post-facto approval is obtained after something has been done.

Now the new shares will be issued to the only new investors except existing shareholders.   

Earlier, Al-Amin Chemicals Industries issued the new shares to raise capital without prior consent of the Bangladesh Securities and Exchange Commission (BSEC).

When it applied to the Dhaka Stock Exchange (DSE) to relist on the SME board, the DSE had rejected its relisting on the bourse as it was non-compliant with securities rules.

Later, considering the overall situation, the BSEC conditionally allowed Al-Amin Chemicals' capital raising on the post-facto approval.

One of the conditions is verification of evidence of deposits in its bank accounts by the new owners, according to a BSEC document seen by The Business Standard (TBS).

Now, Al-Amin Chemicals paid-up capital will increase to Tk30 crore from existing Tk5 crore.

According to the BSEC, the commission in a meeting held on 28 December last year gave the approval.

Munshi Shofiuddin, managing director of Al-Amin Chemicals, told TBS, "We're aware of the decision, but haven't received the approval letter yet."

Al-Amin Chemicals, which got listed in the capital market in 2002, has been lying around in the over-the-counter (OTC) market since 2009 owing to several irregularities.

The company applied to the DSE for relisting on the SME platform at the mid of the last year. But failing to get the DSE approval, it applied to the commission for the post-facto approval.

In October 2023, the DSE carried out an inspection at Al-Amin Chemicals and uncovered some anomalies.

According to the inspection report, which was submitted to the BSEC, the company's new owners raised capital without the regulator's consent, and issued shares in favour of shell firms.

Also, the new owners altered the investment plan of utilising the fund, and their new strategic business plan does not support the company's present performance.

Therefore, the DSE expressed concerns about the company's efforts to protect the interest of investors and its contribution to developing a sustainable capital market.

The new owners issued 2.5 crore fresh shares at Tk10 each. The company's shares last traded at Tk31 each on the DSE on 30 November.

The free-float shares now stand at 8.64%, which was 51.82% before the issuance of new shares.

After taking over the ownership in 2021, the factory operation started in May 2023.

Abul Khayer Heru and his associates bought the previous owners stake of the company. Eshaal Communication bought 14.40% stake, while Monarch Mart, Lava Electrodes, Monarch Express, and three individuals AFM Rafiquzzaman, Mashuk Alam, and Musnsi Shofiuddin bought shares from the former owner.

The factory of Al-Amin Chemicals located at the Bangladesh Small and Cottage Industries Corporation industrial park in Faridpur.

In fiscal year 2022-23, the company has recommended a 2% cash dividend to its shareholders, and its shareholders approved the dividend in its annual general meeting held in December last year.

In a disclosure, the company said it purchased and set up a new aluminium sulphate reactor on 17 January 2024 and increased the aluminium sulphate production capacity by an additional 12 tonnes per day.

Also it received zinc sulphate mono production (wholesaler and distributor) licence from the Department of Agricultural Extension and the trial production and quality check of production were completed before the receipt of zinc sulphate mono licence.