The Bangladesh Securities and Exchange Commission (BSEC) has fined five directors of listed Regent Textile Mills Ltd a total of Tk 100 crore for misusing funds raised through an initial public offering (IPO).

Each of the five directors—Yakub Ali, Yasin Ali, Tanvir Habib, Mashruf Habib and Salman Habib—has been fined Tk 20 crore.

According to a BSEC enforcement order, the company failed to return Tk 90 crore of misused IPO funds to its bank account within the stipulated deadline. The penalties were imposed following an investigation into the misuse of the funds.

The commission found that Tk 80.11 crore, including interest, was used to acquire a 99% stake in Legacy Fashion Ltd, a company owned and controlled by members of the same family that controls Regent Textile.

BSEC said such investment violated regulations because listed companies are not permitted to invest IPO proceeds in subsidiaries, associate companies or other entities under the same ownership.

The commission also found irregularities in the disclosure of related-party transactions and said the company failed to properly comply with Bangladesh Accounting Standard 1 and IAS 24. It also failed to present a true and fair view of its financial position as required under securities regulations.

Regent Textile raised Tk 125 crore through an IPO in 2015 to finance a BMRE project and establish a new garment factory. However, delays in implementing the projects left a significant portion of the IPO proceeds unused for an extended period.

The directors have been ordered to pay the fines within 20 working days of the order. Failure to pay within the deadline will result in an additional penalty of Tk 10,000 per day for each director until the fines are settled.