Photo : Messenger
Monno Ceramic Industries Ltd., listed on the stock market, has stopped production for more than six months.
However, they did not inform the regulatory bodies, the Bangladesh Securities and Exchange Commission (BSEC), and the Stock Exchange, as per the rules, which is a serious offence. Still, Monno Ceramic Industries Ltd. has surprised the business with closed production.
The company has shown an earnings per share (EPS) of Tk 0.74 in the first quarter of the current fiscal from July to September, which is 1750 percent higher than the same period of the previous year.
Meanwhile, The Daily Messenger launched an inquiry as doubts arose over the authenticity of the financial reports. The search revealed more surprising information. On site investigation, it has been revealed that the production of the company has been stopped for the last six months.
That means a 1750 percent increase in profit for companies with closed factories.
An official of the company said on condition of anonymity that the factory has been closed due to a gas shortage and renovation. That is, the production stoppage showed abnormal information about the company. The board of directors of the company is also said to be at loggerheads.
Saidul Islam, the caretaker of the factory, told The Daily Messenger that various works have been going on in the factory since last Eid. As a result, no product was produced during this period.
In this regard, Dhaka Stock Exchange (DSE) Managing Director (MD) ATM Tariquzzman told The Daily Messenger that according to the rules, if a company has sensitive information, it must be reported to DSE on the same day. According to that rule, it will be verified whether the information about the closure of the factory for six months has been concealed or not. At the same time, whether the information in the financial report is correct or not will also be examined.
Mohammad Rezaul Karim, executive director and spokesperson of the regulatory body Bangladesh Securities and Exchange Commission (BSEC), told The Daily Messenger that legal action will be taken against the company if the factory closure information is hidden or false information is given in the financial report.
Those related to the capital market said that the profit shown in the first quarter is unusual which shows manipulation.
It was known that at the same time, better companies than Monno Ceramics, such as Beximco Group’s Shinepukur Ceramics and multinational company RAK Ceramics, saw their profits decline.
The concerned people in the ceramic sector said that the use of ceramic products has decreased due to the global recession, which has also affected the market. On the other hand, the dollar, gas, and electricity prices have increased. So, there is no business growth in this situation.
According to data from the Dhaka Stock Exchange, the company has shown an unaudited earnings per share (EPS) of Tk 0.74 for the period from July to September. In the same period of 2022, this EPS was only Tk 0.04. That is, compared to the previous year, the company has shown a profit of Tk 0.70, or 1750 percent more.
Nasir Uddin, Company Secretary of Monno Ceramic Industries, said that the reason for the increase in profit was that the EPS of the company experienced an increase due to the reduction of operational expenses and the adjustment of deferred tax.
According to DSE sources, the authorised capital of the company listed in 1983 is Tk 37,72,40,000. The company has short- and long-term debt of Tk 82,42,30,000. Short-term debt is Tk 56,48,80,000, and long-term loans are Tk 25,93,50,000. That is, there is twice as much debt as capital.
Meanwhile, the earnings per share (EPS) of Shinepukur Ceramics, one of the best ceramics sector companies, during the same period stood at Tk 0.01, which was Tk 0.10 in the same period of 2022. That is, compared to the same period in 2022, the profit in 2023 has decreased by Tk 0.9.
Another company in the same sector is RAK Ceramics (Bangladesh) Limited. The company's earnings per share (EPS) for the July–September 2023 quarter stood at Tk 0.29, which was the same as in the corresponding period of 2022.
In this regard, capital market analyst Al-Amin, an associate professor at the Accounting and Information Systems Department of Dhaka University, said this is a manipulated company. The EPS shown by the company is practically impossible. The Stock Exchange and BSEC should investigate the matter and take action.
It should be noted that Monno Ceramic's share price started to rise on November 11, ahead of the first quarter report. On that day, the price of each share of the company was Tk 97.90. From there, it increased by Tk 16 and traded at Tk 116.20 on December 5.
The current number of shares in the company is 3,77,24,317. Out of this, 42.47 percent are held by entrepreneurs and directors. The rest of the shares are in the hands of the investors.
Our Savar Correspondent, Abdullah Al Numan, assisted in preparing the the report.
Messenger/Fameema
