The Bangladesh Securities and Exchange Commission (BSEC) has imposed fines totaling Tk 14 million on the board members and two senior officials of listed company Khan Brothers PP Woven Bag Industries Ltd. for allegedly publishing misleading financial information, overstating assets, and violating international accounting standards.

According to a BSEC order issued recently, the penalties were approved at the regulator’s meeting held on May 21 after an investigation found multiple irregularities in the company’s audited financial statements for 2023.

BSEC fined Chairman Mohammad Enamul Kabir Khan, Managing Director Tofayel Kabir Khan, and directors Md. Ruhul Kabir Khan, Hazrat Ali, and Jarin Kabir Khan Tk 2.5 million each. The company’s Chief Financial Officer (CFO), Md. Azizul Jabbar, was fined Tk 1 million, while Company Secretary Tapan Kumar Sarkar was fined Tk 500,000.

The regulator directed the accused to pay the fines within 30 days through bank draft or pay order, warning of stricter legal action if they fail to comply.

BSEC Executive Director and spokesperson Abul Kalam said the penalties followed an investigation that confirmed multiple violations.

The investigation found that the company had materially misstated information in its 2023 audited financial statements. Among the most significant findings was the overstatement of inventory. While the company reported raw materials and finished goods worth Tk 597.46 million, auditors identified a shortfall of nearly Tk 407.04 million.

The regulator also found that two affiliated companies were operating commercial businesses on the same premises owned by Khan Brothers without any rental or lease income being reported in the financial statements.

In addition, export receivables worth about Tk 62.2 million had remained outstanding for years without any provision for doubtful debts, in violation of international accounting standards.

The investigation further revealed that the company reported Tk 100.9 million in subcontracting income without paying value-added tax (VAT) or advance income tax (AIT), raising further concerns over its financial reporting and tax compliance.