B Mirror Report :  Safko Spinning Mills, a company listed on the stock market, is facing a threat to its survival due to continuous losses. Even so, irregularities and corruption by the company’s management have not stopped. As a result of these activities, auditors have been unable to verify the authenticity of accounts amounting to tens of millions of taka shown in the financial statements.

Safko Spinning’s management stated in its financial accounts that it had inventory worth Tk 31.2 million. However, due to a lack of supporting evidence, the auditors could not verify the existence of these assets.

The company has taken loans totaling Tk 1,154.9 million from Bank Asia. Of this amount, it did not repay a single taka during the 2024–25 fiscal year. In addition, no interest expense on this loan has been accounted for.

As of June 30, 2024, the company showed Tk 61.2 million as advance payments under assets. This included advances of Tk 28.8 million paid to a yarn supplier and Tk 31.0 million paid to a packing materials supplier. It was mentioned in the financial statements for the 2024–25 fiscal year that these amounts had been recovered. However, apart from money receipts, no other supporting documents were provided to the auditors as evidence.

In violation of directives from the stock market regulator, the Bangladesh Securities and Exchange Commission (BSEC), Safko Spinning’s management did not transfer undistributed dividends to the Capital Market Stabilization Fund. The company has undistributed dividends amounting to Tk 1.1 million.

The auditors have identified significant risks to the company’s business continuity due to its high level of loans and liabilities, declining regular income or sales, reduced recovery from debtors, and losses incurred in the 2024–25 fiscal year.

It is worth noting that Safko Spinning, which was listed on the stock market in 2000, has a paid-up capital of Tk 299.8 million. Of this, 70 percent is owned by general investors of various categories in the stock market (excluding sponsors/directors). On Saturday (December 27), the company’s share price stood at Tk 13.40.