Troubled Alhaj Textile gets three-member committee to steer it to safety
The Bangladesh Securities and Exchange Commission (BSEC) on Wednesday formed a three-member committee to oversee the functions of the troubledAlhaj Textiles with the view to protecting the interests of the retail investors, which hold a disproportionate stake in the company.
The move is a first for the capital market regulator, in what can be viewed as yet another assured step taken by the new commission headed by Shibli Rubayat ul Islam.
From now onwards, the Alhaj Textiles management must take all decisions in consultation with Saifur Rahman, executive director of the BSEC; Shafiqul Islam, a former additional secretary; and a senior official of the Dhaka Stock Exchange.
“This has been done purely in the interest of investors --the board cannot take any decision without the advice of the committee,” BSEC spokesperson Md Rezaul Karim told Dhaka Tribune.
In a separate directive yesterday, the BSEC appointed Islam along with KM Salah Uddin, a professor of the Dhaka University, and Melita Mehjabeen, an associated professor at the university, as independent directors at the moribund textile maker, where production has been on halt since July 2019.
Alhaj Textiles, which was listed on the stock exchange in 1983, is trading under the ‘Z’ category, which groups low-profile and non-performing companies, for the past year.
“You and your board of directors failed to improve the performance of the company during this period,” said the letter sent to the managing director and chief executive officer of Alhaj Textiles by Md. Sirajul Islam, assistant director of the BSEC.
The company reported a loss of Tk 2.7 crore for the 2019-20 financial year, down from Tk 4.2 crore of losses a year earlier. In the first three months of its 2020-21 financial year, its losses were Tk 4.1 crore.
Furthermore, one of its directors sold a significant number of shares at a high price disseminating price-sensitive information from time to time without declaration, which is a violation of securities rules.
“This is insider trading.”
The shares were sold between December 31, 2017 and September 8, 2019 at more than Tk 100.
Shares of Alhaj Textiles closed at Tk 30.4 yesterday, down 69.8 per cent over the past two years.
Its sponsors and directors hold 12.78 per cent shares, which is way below the regulatory requirement of 30 per cent.
“As a result of your failure, the company is not growing and the shareholders of your company are not getting dividends, which is detrimental to the interest of the investors of the company and undesirable to the commission.”
The general shareholders did not get dividends for the last two years.
The company must not sell and transfer or dispose of any assets without prior approval of the commission, the directive added.
Earlier in December, the BSEC decided to appoint a special auditor to non-performing Alhaj Textiles to monitor and assess the company’s business affairs.
Alhaj Textiles could not be reached for comment.