According to audit reports, Lube-Ref (Bangladesh) Ltd., a stock market-listed company, used its initial public offering (IPO) proceeds improperly. Without getting shareholder approval, the corporation spent more than six times the amount allotted for site development and purchase for its growth project.

Lube-Ref had set aside Tk 7.88 crore for land and land development, but ultimately spent Tk 49.61 crore, an excess of over Tk 41 crore, according to the audit report by MAB & J Partners. An EGM (Extraordinary General Meeting) and subsequent BSEC permission are necessary for altering the use of IPO cash, although neither of these requirements was met.

The audit report further states that the company incurred these expenses in two phases. Up to 30 April 2024, it spent Tk 35.91 crore, all through banking channels. From 1 May 2024 to 30 June 2025, it spent another Tk 13.70 crore. Documents were found for Tk 5.79 crore, but the auditors found no supporting documents for expenses amounting to Tk 7.90 crore.

A Lube-Ref official told media  that the project’s land area had to be expanded from 25 acres to 40 acres. Since the project site on the bank of the Karnaphuli River was very low, 20–24 feet of sand filling was required, increasing costs. He said, “An EGM was not held, but the Commission was informed, and its team inspected the project area.”

The company’s base oil refinery project has a total estimated cost of Tk 1,283 crore, including Tk 150 crore from IPO funds. The project included a jetty, tank terminal, modern refinery, hydrogen plant, and specialized bitumen plant. Project progress was hampered because Tk 900 crore in local loans and Tk 750 crore in foreign loans were not disbursed on time.

The audit report states that until August 2025, Lube-Ref spent Tk 136.89 crore from IPO funds. Of this, Tk 46 crore went toward bank loan repayment, and Tk 37.47 crore was spent in May–June Tk 13.70 crore on land development and Tk 23.40 crore as working capital. The unspent amount from the original fund is Tk 13.10 crore, which stands at Tk 19.86 crore including interest.

Once considered highly profitable, Lube-Ref posted a record loss of Tk 66 crore in the 2024–25 financial year. Due to banking restrictions, LC shortages, and a working capital deficit, the company did not declare any dividend for the first time.

After being listed on the market, the company remained profitable until 2022–23, registering its highest profit of Tk 36.43 crore in 2020–21. However, LC complications from October 2023 disrupted raw material imports, forcing the company to procure raw materials from local suppliers. As a result, it incurred a loss of Tk 10.76 crore in 2024, compared to a profit of Tk 20.47 crore the previous year.

Lube-Ref kept Tk 13.10 crore of IPO funds in a special notice deposit account at Social Islami Bank. Due to the bank’s liquidity crisis, the company was reportedly unable to withdraw the funds. With interest, the unspent amount stood at Tk 19.86 crore as of August 2025.

Established in 2001, Lube-Ref began commercial production in 2006. Currently, 60% of its lubricants come from recycled sources, while 40% are produced from imported base oil.