Business Mirror Investigation
Board of directors of C&A Textile a listed company in both Dhaka and Chittagong stock exchanges has siphoned off its entire Tk 45 crore drew from initial public offering (IPO) making the company an empty basket.
The directors lead by its Chairman Gazi Golam Zakaria Jyoti and Managing Director Rukshana Morshed transferred the public money to other business showing thumbs up to all corporate laws, Business Mirror conducted an investigation has found.
The Bangladesh Securities and Exchange Commission recently imposed penalties to the directors but shareholder claimed that the penalty is not sufficient. The shareholders demanded share buyback at the rate of its company share face value from the market as punishment of the crime.
Gazi Golam Zakaria Jyoti is now supplying readymade garments to European and USA buyers by which he became a leading RMG supplier in the country.
Md. Shah Alam a shareholder of C&A textile said he possess 10,000 shares which he bought at Tk 4.5 lakh in 2015. If he sell the same share right now he will get Tk 14000 only.
“Our corporate laws are very insufficient to protect share holders. There has no accountability.” Md. Shah Alam said adding that they only can stage demonstration in the road protesting misconduct while Jyoti is doing everything with social respect by looting public money.
When asked Jyoti told Business Mirror that he only hold two per cent of share of the listed C&A Textile.
“How you accountable only me when I personally hold two per cent of share of the entire company,” he said. He identified the company Managing Director Rukshana Morshed as a close relative of a Chittagong based Business Group Chairman.
“Do you know me? Do you know the Managing Director. She is close relatives of a top Businessmen,” he said
The market capitalization came down to TK 76 lakh on July 30, 2020 against its face value of Tk 45 crore.
At initial stage AFC Capital Limited, BD Finance Capital Holdings Limited, ICB Capital Management Limited, MTB Capital Limited, AIBL Capital Management Limited, SBL Capital Management Limited were under-right a portion of share since IPO. But the institutional under righters also offloaded most of their shares of C&A Textile.
Currently Rukshana Morshed, Managing Director of the company holds 18.57% share flowed by Gazi Golam Zakaria Jyoti, Chairman 2.00%, Iftekhar Abdul Hai Director 2.00%, Sharmin Akther Lovely Director 3.00% and Bangladesh Shoes Ind. Ltd. 4.71% per cent of share.
The directors broke all types of corporate governance law and transferred its fund to other companies owned by Jyoti, sold its machinery, land and even factory buildings at Kalurghat, Chattgram.
The Bangladesh Securities and Exchange Commission on Wednesday fined the directors of C&A Textile Limited Tk 19 crore in total and banned them from becoming directors of any other listed company for violating a number of securities rules.
The regulator found that C&A Textile’s directors Rukshana Morshed, Sharmin Akther Lovely and Bangladesh Shoes Industries Limited together sold around 1.22 crore shares of the company without prior declarations and earned around Tk 12 crore from the sales.
After the sales, the operation of the company was shut down and it remains shut still now.
So, the commission fined Rukshana Tk 8 crore, Sharmin Tk 4 crore and Bangladesh Shoes Tk 2 crore.
Besides, the textile company did not submit the monthly shareholding reports of directors between August, 2017 and August, 2018 and also did not respond to the queries made by the BSEC and the Dhaka Stock Exchange, breaching securities rules.
So, the commission fined C&A Textile’s five directors Tk 1 crore each for the rule violation.
When launched IPO the company in its prospectus claimed that C&A Group is a reputed Manufacturer and Exporter of all kinds of knitwear garments in business capital of Chittagong, Bangladesh. Its range of products are Men’s, Ladies, Boys, Girls/T-Shirt, Polo Shirt, Fleece Sweat Shirt, Polar Fleece Tops, Knit Pant & Polar Fleece Robes. It claimed that it have vertical operations incorporating knitting, dyeing, finishing & garments making with the additional capability of elastic, embroidery machines & printing.