Padma Cement, a junk company listed on the Dhaka Stock Exchange, has decided to wrap up its business after incurring losses over the years.
“The company is going to be winding-up,” it said in a statement yesterday. This is the first listed company in Bangladesh to be winding up.
Around nine years into its commercial operation since April 2001, the company located at Baghabari in Sirajganj has suspended its production.
The winding up of a company requires the termination of legal existence through stopping its current business. For this reason the assets of the company will be distributed among the shareholders as well as creditors as laid down in the company act.
The company asked its shareholders to contact with official liquidator of Padma Cement with proper documents before March 21, 2014.
Nobody from the company and its liquidator M Moksadul Islam were available for comments even after sending text messages. The DSE had sent the stock to the OTC (over the counter market) in 2010 after its production suspension.
Later, its land was rented out to AR Cement, but later in 2011 banks confiscated its land and sold to Deshbandhu Cement. The company owed Tk40 crore to banks.
Since 2003, the company gave no dividend to its shareholders, but in listing year 2002 it announced dividend payout.
Incorporated in 1998 as a private limited company, it subsequently converted into public limited company with an authorised capital of Tk30 crore. After completion of its IPO the paid up capital stood at Tk 27.6 crore.
It produced only port-land cement. The production capacity of the company stood at 720 metric tonnes per day. The brand name of the product was “DOLPHIN.”
In 2009, Bangladesh Securities and Exchange Commission detected financial statement anomalies and asked to explain their position.
During the year, the net operating loss was reduced to some extent but the accumulated loss of the company as of September 30, 2008 stood at Tk26 crore.
Though the total assets of the company was higher than that of total liabilities, the then existing liabilities of the company was more than Tk11 crore against assets of Tk3.7 crore.
These factors raised question as to whether the company will be able to continue as a going concern in the near future.
