Fu-wang Foods Dubious Takeover Raises Money Laundering Suspicion

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Fu-wang Foods Dubious Takeover Raises Money Laundering Suspicion

Fu-wang Foods Ltd a confectionery producing listed company has recently been taken over by a sham Japanese company which raised money laundering apprehension by different capital market stakeholders.

The paper-based company injected over Tk 40 crore to two listed companies namely Fu-wang Foods Ltd and Emerald Oil Industries Ltd during last few months.

The skeptic company titled MINORI CO. LTD. ( JAPAN ) owned by Bangladeshi Citizen Mr. Miya Mamun has no actual operation in Japan other than an attractive website and a gorgeous brochure.

Minori or Miya Mamun did not provide any response to several emails sent to their mail address mentioned at the website. While his relative  Afzal Hossain also the Managing Director of Emerld Oil Industries Ltd told Business Mirror that he is now at Canada for treatment.

The company claims that it has been producing agricultural products since 2012 by establishing a chicken farm on a small rented plot of land in Takomachi, Chiba, but actually there has no such kinds of farm exist in real.

In reality Minori is a very popular Japanese cuisine available at all reputed Japanese restaurants among those ‘Savor Japan’ is most famous that located at Takomachi, Chiba.

The owner Miya Mamun hails from Chandpur who fled Japan after completing his bachelor degree in 2010 from Chittagong University and engaged himself serving as trainer for foreign language course training at Tokyo, Japan, sources said.

Mr Aslam has been operating Aluminum  business in Bangladesh and had serious setback due to Corona Virus pandemic since 2020.

But a source close with Mr Mamun informed Business Mirror that Mamun had came tie with an influential businessman in Bangladesh who actually provided all the fund to make his illegal earning white.

Why Minori bought Fu Wang Foods Ltd?

Once upon a time Fu Wang Foods Ltd was a pioneer company in Bangladesh in automated bakery products with latest Taiwanese technologies. It had few competition in the market and had bagged a huge market share in Bangladesh.

But the company started losing its grip in Bangladesh as it produces huge amount of tiles at its sister concern Fuwang Ceramic Industries Ltd which remain unsold for a long, Md Sharif Al Mahmud, Company Secretary of Fuwang Foods Ltd said.

The group Tahi owners attained huge operation loss due to the over production and left Bangladesh gradually by selling their share in Bangladeshi people.

“After the setback Fuwang Foods never could  revive rather it ruins over the years by emblazing money by board of directors, irregularities at all sorts of way and providing crooked accounts for years.,” a official of the an Audit Farm conduct to Fu-wang Foods audit told Business Mirror

“At this moment large groups like Pran RFL, Meghna Group of Industries, City Group, Bashundhar Group and Akij are competing bakery business and all of those groups have their own flower and sugar mills, Sharif Al Mahmud said.

“At this moment it quite impossible to grab market share with competing such large group of companies, the company secretary claimed. He added

How Fuwang Foods became a baseless basket?

Earlier, Bangladesh Securities and Exchange Commission (BSEC) appointed Rahman Mostafa Alam and Co as an independent auditor whoaudited the company’s annual accounts between 2012 and 2020.

The auditor found that the company has shown sales of Tk89 crore in 2020-2021 fiscal, the auditor said in a qualified opinion that Fu-wang Foods could not provide any documents regarding its sales.

Besides, in the same year the company in its annual accounts has mentioned that it will earn money Tk53.15 crore receivable from its customers, but it could not provide any list of debtors of Tk32.40 crore. Against the claim the auditor could only confirm Tk0.38 crore from debtors during the same fiscal.

The company also mislead in inventory earning for about Tk 10 crore. Advance against salary, sales and loan to subsidiary.

Fu-wang Foods Ltd started its journey in 1997 by Thai-based investors. The then board of investment allowed the company to do business in the food processing sector on the condition of 30% exports.

But later, foreigners sold the company to local investors. Arif Ahmed Chowdhury. Since its inception, the company has produced various packet food items like breads, biscuits, cakes, toasts, wafer bars, chocolates, instant noodles, drinking water, carbonated drinks, and energy drinks.

The company got listed on the capital market in 2000. It paid only stock dividends to the shareholders till 2018. After the dividend policy was amended by the regulator, the company paid only 2% cash in FY19, 1.65% cash in FY2020, and recommended the same in FY21.

Recently after the information that the share of the company has been acquired by Minori Japan, Fu-Wang Foods Limited stocks surged 83 per cent in the span of nine trading days.

Still, the stock of Fu-Wang Foods soared to Tk 42.9 on the Dhaka Stock Exchange (DSE) yesterday from Tk 23.5 on July 2.

It came after its stocks had been stuck in the floor price for several months and no investor had placed any buy order before July 2. Suddenly, some speculations have changed the scenario, said a stockbroker, preferring anonymity.

Following queries from the DSE, Fu-Wang Foods has informed the DSE twice – on July 9 and July 10 — that it had no undisclosed information, but general investors are not paying any heed.

Fu-Wang Foods suffered a huge loss in the fiscal year of 2021-22.

Earnings per share of the company were Tk 0.17 in the first nine months of the last financial year of 2022-23, up from Tk 0.11 during the same period a year earlier.

A merchant banker Shah Newaz said when investors hear a rumour that a foreign company will buy stakes in a company and see that the stock price rise, they also believe the speculation and rush to buy the share.

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