DSE disclosed it on Wednesday, saying that the board of directors of Alhaj Textile Mills decided to lay off the factory for an indefinite period. The company also decided to lay off its workforce, added the declaration
Publicly listed company Alhaj Textile Mills Limited has stopped its production for an indefinite period amid a severe fall in yarn sales, according to a Dhaka Stock Exchange (DSE) web post.
DSE disclosed it Wednesday, saying that the board of directors of Alhaj Textile Mills decided to lay off the factory for an indefinite period. The company also decided to lay off its workforce, added the declaration.
Earlier, the textile mill’s production was suspended for four times for different durations.
“We still have unsold yarns worth Tk28 crore lying in the warehouse," a senior official at the textile mill told Dhaka Tribune.
According to the DSE disclosure, Alhaj Textile Mills’s management decided to retrench the staff and workers of the mills with effect from October 8, 2019 as per Bangladesh Labour Law section 16(7) and 20(2) (KA).
The disclosure also informed that the mills would reopen subject to improvement of the market situation.
Talking to Dhaka Tribune, yarn manufactures blamed the devaluation of the Taka against the US dollar, misuse of bonded warehouse facility, smuggled yarn, and cheap Indian yarn that is often imported through trade misinvoicing for the present dismal situation of Aljaj.
They said more textile mills would follow suit, if situation did not improve.
The shares in Alhaj Textile Mills closed the day at Tk42.90, down by 9% from Tk47.60 per share in the previous session on DSE.
Incorporated as a private limited company in 1962, the company was converted to a public limited company in 1967 and listed at DSE in 1983. Its manufacturing units are located in Iswardi, Pabna.
According to the DSE data, sponsor-directors hold 12.78% of Alhaj Textile Mills share, government 0.03%, institutions 12.97% and general investors hold 74.22%.
The company's sponsor-directors do not hold at least 30% stake, as made compulsory in the securities law, in the firm. Last month, BSEC decided to trade the stocks of Alhaj Textile Mills on the spot market due to its non-compliance of the 30% provision.
The company has a paid-up capital of Tk22 crore, and belongs to ‘A’ category of DSE.
Meanwhile, the commission found that Md Shamsul Huda, a shareholder-director of Alhaj Textile, violated securities laws by selling five lakh shares and buying nine thousand shares without declaration. The commission froze his BO account.
The BSEC has instructed its Enforcement Division to take legal action against Shamsul Huda.