B Mirror Report : Auditors have identified serious documentation deficiencies involving around Tk76 crore withdrawn in cash by stock market listed Fortune Shoes Limited during the 2024–25 financial year, raising concerns that the money cannot be properly traced.
The findings were disclosed in an audit conducted by G Kibria & Co, Chartered Accountants. According to the audit report, the company withdrew the funds from its regular account with Islami Bank through a total of 207 cheques.
However, Fortune Shoes failed to submit key supporting records required to verify how the money was used. The missing documents included the cash book, bank book, cheque counterfoils, invoices, vouchers and delivery challans. Auditors noted that the absence of even a basic cash book made it impossible to determine whether the withdrawn funds were spent for genuine business purposes.
On Thursday (8 January), shares of Fortune Shoes closed at Tk14.40 on the Dhaka Stock Exchange.
The audit report also drew attention to unresolved insurance claims amounting to Tk19.73 crore related to fire damage to raw materials and finished goods in 2022, which were recognised in the company’s financial statements. Of the total claim, Tk13.65 crore was lodged with Takaful Insurance Limited, while Tk6.08 crore was submitted to Prime Insurance Company Limited. Nearly three years later, the claims remain unpaid.
Auditors stated that no correspondence or evidence regarding the probability of recovery of these claims was provided, creating significant uncertainty over whether the amounts are realisable.
In addition, the auditors highlighted irregularities in dividend payments. Although Fortune Shoes declared and approved dividends for the 2022, 2023 and 2024 financial years, the full amounts were not disbursed. While separate dividend accounts were opened with Prime Bank PLC, the company did not transfer the entire approved sums. As a result, unpaid dividends stood at Tk10.05 crore as of 30 June 2025, which auditors said violates relevant laws and regulations.
The report further identified material mismatches between the company’s accounting records and its monthly VAT returns. These discrepancies included Tk143.63 crore in revenue, Tk13.86 lakh in local raw material purchases, and Tk40.21 crore in imported raw material purchases, pointing to major inconsistencies in financial reporting.
Concerns were also raised regarding employee retirement benefits. The auditors noted that Fortune Shoes does not operate any approved provident fund or gratuity scheme. Instead, an employee-managed fund is in place without proper authorisation and is not subject to regular audits, which the auditors said is contrary to Financial Reporting Council (FRC) guidelines.
