Photo: Messenger
Al-Arafah Islami Bank Limited has closed down Khulna Printing and Packaging Limited, a listed company, due to its failure to repay a substantial bank loan amounting to Tk 67.50 crores.
The bank has taken possession of the company's locked-up factory, causing a halt in production. Surprisingly, the company authorities didn’t disclose this crucial information to both the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE), thereby violating the Listing Act 51.
The DSE Listing Regulation explicitly states that companies with sensitive information must promptly disclose it to the DSE. Failure to report such information within six months empowers the DSE to delist the company from the capital market. Khulna Printing's non-disclosure of the closure and loan default is a clear violation of these regulations.
Khulna Printing had pledged 123.50 acres of land in Khulna and Dhaka to secure the loan from Al-Arafah Bank. The outstanding amount of Tk 67.50 crores, including principal, interest, and other charges, led to the bank publishing an auction notice on April 16, 2023. Al-Arafah Bank had initiated the auction of the mortgaged land since October 2021 due to the company's continuous default on loan payments.
In addition to the financial troubles, there are concerns about market manipulation surrounding Khulna Printing. Despite reporting losses for six consecutive years, the conglomerate managed to boost its share price more than fivefold in just a month, raising suspicions of market manipulation. DSE authorities took note of this unusual activity and, on November 22, wrote and emailed the company seeking clarification on any price-sensitive information behind the sudden surge in share prices. Unfortunately, no response was received from Khulna Printing.
Subsequent investigation by a DSE team revealed that the company premises were locked. This discovery prompted the DSE authorities to inform the Chairman and Managing Director of DSE. A detailed report on the matter is being prepared by the delegation to be submitted to the Bangladesh Securities and Exchange Commission (BSEC).
Despite being listed in 2014, Khulna Printing and Packaging Limited has faced financial challenges, showing losses in multiple years. According to DSE data, the company reported losses per share of Tk 1.22 in 2018, Tk 2.34 in 2019, Tk 0.36 in 2020, Tk 6.12 in 2021, and Tk 3.10 in 2022. Consequently, the company has not distributed dividends to shareholders since 2021, reflecting its financial difficulties.
As of June 30, 2022, the company carries a substantial bank debt of Tk 55.16 crore, comprising a short-term loan of Tk 23.61 crore and a long-term loan of Tk 31.55 crore. The current number of shares stands at 730,40,000, with the last traded stock price reported at Tk 51.70 on February 4. This represents a significant increase from Tk 24.60 on January 16, indicating a more than double rise of Tk 27.01. Moreover, the share price has surged more than fivefold to Tk 42.62 within a span of just three months, considering the share price was Tk 9.80 on November 29.
It is worth mentioning that Khulna Printing and Packaging Limited raised Tk 40 crore from the stock market through an initial public offering (IPO) in 2014. Founded by Amjad Hossain and his family, the current stake of the entrepreneur directors in the company stands at 39.67 percent.
The situation surrounding Khulna Printing and Packaging Limited has taken a more serious turn with revelations of a court order on October 21, 2021. The court directed the attachment of all bank accounts belonging to Khulna Printing's chairman, SM Amjad Hossain, and his family. This legal action stems from a money laundering case filed by the Anti-Corruption Commission (ACC). Subsequently, the factory of the company was closed, and SM Amjad Hossain, along with his family members, reportedly fled abroad.
ATM Tariquzzaman, the Managing Director of Dhaka Stock Exchange Plc, emphasized the failure of Khulna Printing to disclose this crucial information to the stock exchange. According to the rules, listed companies must promptly inform the stock exchange of any sensitive information. The lack of disclosure is considered a violation of Listing Act 51. Tariquzzaman stated that the matter would be reported to the Bangladesh Securities and Exchange Commission (BSEC), and the BSEC would take appropriate legal actions.
In response to the potential non-compliance by the company, Mohammad Rezaul Karim, Executive Director and Spokesperson of BSEC, commented that if the Dhaka Stock Exchange (DSE) or Chittagong Stock Exchange (CSE) identifies any non-compliance and provides recommendations, the BSEC will take necessary actions in accordance with the law.
Since the company is closed and the owner is out of the country, it was not possible to contact anyone from the company.
Messenger/Disha
