Zahintex Industries is facing the threat of delisting from the inventory market due to failure to pay money dividends, mounting losses, a prime lengthen in long-time length loans, and discrepancies in monetary reporting.
The Bangladesh Securities and Change Commission (BSEC) has initiated an investigation into the firm and has sought varied paperwork to evaluate its monetary effectively being.
Basically primarily primarily based on a BSEC notification, if a firm incurs a secure loss for 3 consecutive years and fails to characterize any money dividends at some level of that length, it could possibly well well face delisting from the first board. Additionally, if the gathered loss or debit balance within the firm’s retained earnings exceeds its paid-up capital, it could possibly well well additionally be delisted from the capital market.
The fragment tag of the firm closed at Tk5.20 on the Dhaka Inventory Change (DSE) on Thursday.
The BSEC has seen that the firm has been incurring fundamental losses over time and has no longer declared any dividends for traders for four consecutive years, making it field to the exit opinion suggestions.
As of 1 July 2022, the firm reported retained earnings of Tk42.18 crore. On the opposite hand, the particular settle at the tip of June 2022 modified into Tk66.83 crore, leading to a discrepancy of Tk24.65 crore.
Equally, on 31 March 2023, the firm reported retained earnings of Tk66.59 crore, whereas the particular settle must private been Tk91.24 crore, reflecting the same discrepancy of Tk24.65 crore.
The firm’s administration additionally failed to notify severe, tag-sensitive info about relocating two manufacturing facility premises and altering the head voice of labor take care of to regulators and traders on time.
Zahintex Firm Secretary Md Liakat Ali Bakhtiar did now not answer to phone calls from this TBS reporter searching for comment on the topic.
Basically primarily primarily based on the regulator, the inspection crew requested varied paperwork, comparable to loan classification attach of abode and monetary institution statements for export proceeds, however the firm delayed offering these paperwork.
From 2019 to 2023, the firm’s long-time length loan elevated very much, rising from Tk89.97 crore to Tk166.51 crore by June 2024, an 84.07% lengthen.
The monetary statements existing that the firm’s earnings per fragment (EPS) private been detrimental for the previous 5 years. Irrespective of this, long-time length loans continued to upward push, which is detrimental to the interests of total traders and the capital market.
On the tip of FY23, the statutory auditor reported a cloth inventory balance of Tk159.23 crore, roughly 3.98 occasions elevated than the firm’s income. This inventory has been carried forward for a entire lot of years, increasing dangers of obsolescence and tying up working capital. The excessive inventory additionally leads to elevated storage charges and features liquid money, which requires a proof from the firm.
The BSEC has now asked the firm to put up the following paperwork within seven working days:
Mortgage sanction letters, loan rescheduling paperwork, and loan statements for the ideal 5 years; the export records, VAT returns, gross sales, inventory info, and connected paperwork for the ideal 5 years; and the justification for transferring the revaluation reserve and PSI (tag sensitive recordsdata) reviews for the ideal 5 years.
In June 2023, the BSEC launched a overview into the firm following the discovery that Zahintex had submitted diversified monetary statements to the Nationwide Board of Revenue and the Dhaka bourse.
The income authorities additionally identified as upon the market regulator to have shut action against the knit garment manufacturer, which modified into listed on the bourses in 2011 to enhance Tk50 crore with a Tk15 top rate per fragment for loan funds and dealing capital.
As of 30 November 2024, the firm’s sponsors and directors held 36.94% of the shares, institutions held 21.35%, and the total traders held 41.17%.
