Acme Pesticides Limited, a publicly listed company, is embroiled in serious fraud allegations involving both investors and regulatory authorities. A revealing report from the Bangladesh Securities and Exchange Commission (BSEC) has disclosed alarming findings, including financial distortions before the company’s listing, improper use of IPO funds, and the mishandling of investor voting rights.

The BSEC’s inquiry found that Acme Pesticides provided inconsistent information in its financial statements during the application process for listing. For example, discrepancies were noted in the five-year earnings per share (EPS) and net operating cash flow per share (NOCFPS). In the latter part of 2019, an unusual 97 percent surge in paid-up capital to Tk 105 crore was reported, which raised significant concerns among the investigators. Additionally, the prospectus contained conflicting details about the independent directors.

Following its stock market listing, the company engaged in significant irregularities concerning the utilization of its IPO proceeds. They failed to submit timely audited reports and diverted funds to unapproved sectors. The most alarming accusation is that evidence has surfaced indicating loans were made to various entities linked to the directors’ interests.

In 2021, the company established six fixed deposit receipts (FDRs) with Southeast Bank and used them as collateral to secure a loan of Tk 13 crore for Shanto Agro and Trading Farms. Likewise, a loan of Tk 7 crore was extended to Sharib Trade Sanstha, which is associated with the managing director’s son. This substantial loan remains unrecovered, placing investors in jeopardy.

Significant irregularities have also been detected concerning the construction of factories and the acquisition of new facilities as outlined in the IPO prospectus. The investigation team visited the site and discovered that the unit purportedly built at a cost of Tk 10 crore was nonexistent. Instead, they found several dilapidated structures and a three-story office building. Although expenses were reported, no supporting evidence was available. Furthermore, progress on acquiring new factories and equipment has been unusually sluggish.