B Mirror Report : Due to allegations of share manipulation, Fine Foods is a highly talked-about company in the stock market. The company’s share price has risen abnormally despite subpar business performance. According to reports, Fine Foods’ management has been fabricating financial statements with inflated assets, larger profits, and lower expenses in order to manipulate the share price. The company’s audit reports have brought attention to these problems.

For quite some time, the low-capital shares of Fine Foods have allegedly been manipulated, pushing the share price above Tk 380. There is direct collusion by the company’s management in this manipulation. To facilitate the price manipulation, the company has been providing artificial financial data in various ways. As part of this scheme, the company reported unusually high profits even in the first quarter of the current fiscal year.

On the afternoon of November 6, the company disclosed that its earnings per share (EPS) for the first quarter of the current fiscal year stood at Tk 2.57, compared to Tk 0.62 during the same period of the previous year. This indicates an increase of Tk 1.95 or 315 percent in profit.

However, for several years auditors have been raising questions about the authenticity of Fine Foods’ profits. They have stated that they could not verify the accuracy of the company’s reported profits and other financial information, and that significant false information may have been provided. These concerns were also reiterated in the financial statements for the 2024–25 fiscal year.

According to the auditors, in the 2024–25 fiscal year the company reported revenue of Tk 11.89 crore, accounts receivable from credit sales amounting to Tk 2.86 crore, raw material purchases of Tk 3.79 crore, and expenses of Tk 2.62 crore for Fingerlink purchases. However, the company claimed that almost all these transactions were conducted in cash. Due to the lack of credible supporting documents and the cash-based nature of the transactions, the auditors were unable to verify their authenticity, and stated that the disclosed transaction data could be false.

Fine Foods also reported capital stock worth Tk 30 lakh in its financial statements, shown at historical cost value. This directly violates International Accounting Standard (IAS) 41, as the company did not consider the fair value of these assets. Due to insufficient information, the auditors were unable to determine the extent of misstatement or false reporting.

The company reported inventory worth Tk 11.45 crore. The auditors stated that the company only partially cooperated during the audit process to verify this inventory. As a result, even through physical inspection and alternative audit procedures, the auditors could not verify the authenticity of the inventory. Consequently, the auditors warned that false information may have been provided regarding inventory and the cost of goods sold (COGS).

According to the auditors’ remarks, if the company understated the cost of goods sold, then its net profit has been overstated—an issue that would not be unusual for a company allegedly involved in share manipulation.

In the 2024–25 fiscal year, the company incurred salary and wage expenses of Tk 36 lakh, which were paid in cash outside the banking channel. This is unacceptable under Section 55(ṭa) of the Income Tax Act 2023.

Although listed companies are required to have a minimum paid-up capital of Tk 30 crore, Fine Foods has only Tk 13.97 crore, which violates the rules of the Bangladesh Securities and Exchange Commission (BSEC).

According to BSEC directives, Fine Foods also failed to transfer undistributed dividends to the Capital Market Stabilization Fund. The company currently has undistributed dividends amounting to Tk 9 lakh.

Regarding these issues, Abul Kalam, Director and Spokesperson of the Bangladesh Securities and Exchange Commission (BSEC), told Arthabanijya that annual reports of listed companies, along with auditors’ opinions, are submitted to the Commission at the end of each fiscal year. These reports are reviewed by the relevant departments, and if any irregularities or inconsistencies are found, the Commission takes action in accordance with the law.

It is noteworthy that Fine Foods, which was listed on the stock market in 2002, has a paid-up capital of Tk 13.97 crore. Of this, 86.08 percent is owned by general investors (excluding sponsors and directors). On Monday (December 22), the company’s share price stood at Tk 380.70.