B Mirror Report: Fortune Shoes, a listed company in the stock market, has a paid-up capital of Tk171 crore, of which 69.07% is owned by different categories of investors in the stock market (excluding sponsors/directors). The company’s chairman Mizanur Rahman allegedly withdrew Tk76 crore through 207 cheques, effectively leaving the company almost empty.
This information has emerged in the audit report of the company’s financial statements for the 2024–25 fiscal year.
The company’s board includes Md Mizanur Rahman as chairman and Roksana Rahman as managing director. Other shareholder-directors on the board are Amanur Rahman and Md Rabiul Islam.
According to the auditor, Fortune Shoes authorities withdrew Tk75.60 crore in cash through 207 cheques from Islami Bank account number 20501110100247912 during FY2024–25. Due to the absence of proper and sufficient documentation such as bank books, cash books, cheque books, cheque counterfoils, photocopies of cheques, invoices, bills, and delivery challans the auditor could not find any evidence that the money was used for the company’s business activities. The company also failed to provide the cash book to the auditor.
Accounting professional Monowar Hossain told media that cash transactions have been restricted to maintain transparency and prevent corruption. Therefore, withdrawing Tk76 crore in cash is not a good sign. Based on his long experience, he believes it is nothing but misappropriation of company funds.
Meanwhile, in 2022, Fortune Shoes suffered losses of Tk19.73 crore worth of raw materials and finished goods due to a fire. The company later filed insurance claims for the damages Tk13.65 crore with Takaful Insurance Limited and Tk6.08 crore with Prime Insurance Company Limited. Accordingly, the company reported Tk19.73 crore as contingent assets in its financial statements.
However, under the Insurance Claims Management Guidelines 2024 (Clause 05(08)), insurance claims must be settled within 90 days of submission. Even after nearly three years, the insurance companies have not settled Fortune Shoes’ claims. The auditor noted that the amount may not be recoverable.
Fortune Shoes declared and approved dividends for 2022, 2023, and 2024 and opened a separate account at Prime Bank to deposit the dividend funds. However, the full dividend amounts for those three years were not transferred to that account. As a result, the legally approved dividends have not been distributed to shareholders, leaving Tk10.05 crore in unpaid dividends.
The auditor also stated that the company has not formed a Workers’ Profit Participation Fund as required under labour law.
Attempts were made to contact Fortune Shoes chairman Mizanur Rahman and company secretary Nazmul Hossain since 4 February, but no comments were obtained. Nazmul Hossain had said on 5 February that he would consult the chairman and provide details, but he did not respond afterward.
Regarding the issue, Abul Kalam, director and spokesperson of the Bangladesh Securities and Exchange Commission (BSEC), told media that after the fiscal year ends, the annual reports of listed companies along with auditors’ opinions are submitted to the commission. The relevant department reviews them, and if any irregularities are found, the commission takes action according to the law. Fortune Shoes will be no exception, he added.
In its 2022–23 financial statements, Fortune Shoes reported fixed assets worth Tk93.60 crore, but the auditor raised concerns about the authenticity of those assets due to the absence of a proper and complete fixed asset register.
The auditor also expressed doubts over inventory worth Tk87.75 crore and cost of goods sold worth Tk144.79 crore, noting risks of misstated information and possible non-existence of assets.
It is worth noting that Fortune Shoes was listed on the stock market in 2016. The company’s paid-up capital stands at Tk170.66 crore, of which 69.07% is held by general investors (excluding sponsors/directors). As of Saturday (7 March), the company’s share price stood at Tk13.90.
