B Mirror Report: The Bangladesh Securities and Exchange Commission (BSEC) has uncovered financial irregularities amounting to about Tk 2 crore in the transactions of listed company Index Agro Industries Limited. The regulator has fined three individuals, including a company director, for their involvement.

The findings were revealed in BSEC’s enforcement action report for March.

According to the investigation, the company conducted related-party transactions worth around Tk 2 crore with its subsidiary, Index Construction Limited, which were not disclosed in the audited financial statements, despite such disclosure being mandatory under international accounting standards.

A BSEC inspection team visited the company’s head office and four factories and identified the irregularities by reviewing relevant documents.

The probe also found a clear conflict of interest, as both the Chairman and Managing Director of Index Agro were involved in the management of the related entity. However, this information was not disclosed in the financial statements.

Additionally, irregularities were detected in the approval process for construction and civil works. In some cases, signatures of representatives from the related company were used instead of those of authorized officials. Questions were also raised about whether competitive bidding procedures were properly followed.

Although audit firm G Kibria & Co. stated in its report that no related-party transactions had taken place, BSEC’s investigation found otherwise, raising concerns about the credibility of the audit report.

BSEC said that concealing such information misleads investors and violates securities laws. As no satisfactory explanation was provided during the hearing, financial penalties were imposed on those involved.