BM Desk : GQ Ballpen Industries Limited, a diversified entity listed on the capital market, has ceased production since last year after experiencing operating losses for a decade. The company has halted production for 12 months to balance, modernize, rehabilitate, and expand (BMRE) its factory in an effort to mitigate losses and enhance product quality. However, despite its commitment to invest significantly after completing BMRE, the company has not disclosed any updates on the progress of BMRE activities even after the designated timeframe has elapsed. Although legal provisions exist to take action against such conduct by listed companies, the Dhaka Stock Exchange (DSE) has not acted in the case of GQ Ballpen. Instead, general investors and participants in the capital market have raised concerns regarding the DSE’s role, accusing it of adopting a lenient approach towards the company. This information has been disclosed by relevant sources.
According to the Securities Act, a company will be classified as ‘Z’ category if it fails to distribute dividends or hold an AGM for two consecutive years, if production or business operations are suspended for more than six consecutive months without BMRE, or if accumulated losses surpass the paid-up capital. Nevertheless, despite such regulations, the primary stock exchange DSE has not taken any measures against GQ Ballpen.
When inquired about this, DSE Public Relations Officer Shafiqur Rahman stated to Orthasambad, “I cannot provide any information at this time. I will consult with the relevant department and get back to you.”
In response to this inquiry, Md. Abul Kalam, director and spokesperson of the regulatory body Bangladesh Securities and Exchange Commission (BSEC), informed Orthasambad that if the DSE does not furnish information regarding the progress of BMRE activities, actions will be taken in accordance with its regulations. The commission will also investigate the issue.
Despite numerous attempts to reach GQ Ballpen’s Company Secretary KM Ershad via mobile for comments, no response was received.
Investors say that in the interest of establishing good governance in the capital market, the DSE must avoid biased behavior and apply rules equally to all companies. Otherwise, confidence in the market cannot be restored.
According to market analysts, information about the progress of BMRE is a message about the future capabilities and growth of a company. If it is kept secret, there is a risk of investors being cheated. And if the DSE is not strict on this matter, it will be difficult to maintain transparency and order in the market.
Earlier, the DSE had written to the company on June 29 to inquire about the progress of BMRE activities. In response, a letter signed by GQ Ballpen’s Company Secretary KM Ershad was sent to the Dhaka Stock Exchange (DSE) on Monday (June 30).
It said, “Due to several uncontrollable external factors, we were unable to proceed with the BMRE initiative within the stipulated time frame. However, despite our efforts to borrow the required BMRE funds from various banks, we have not received a positive response. Most of our equipment is of Indian origin. Since July 2024, the Indian authorities have suspended the issuance of visas for Bangladeshi nationals due to the current political situation between the Government of India and the Interim Government. Our Plant Manager has made several attempts to obtain an Indian visa from the Indian High Commission but has not received any response so far. Due to this, we have not been able to inspect, negotiate and procure the required equipment and components from India, which has resulted in significant delays in the implementation of our BMRE plan.” The letter said, “As an alternative, procuring the required equipment from suppliers in Germany or China would have cost significantly more. Which would have exceeded the estimated BMRE costs, making such purchases financially unfeasible for our business.” In addition, the company planned to invest a portion of the BMRE costs using the rental income of a commercial building located in Uttara, Dhaka. However, in the context of political uncertainty and economic slowdown, especially under the ongoing interim government, domestic and foreign investors are reluctant to enter into expansion of operations. As a result, the company has been able to rent only one floor out of the six-story building. This is very inadequate to cover the company’s BMRE costs.
The letter goes on to say that the business has not been able to finish the BMRE by the deadline. The business has declared its intention to start up again and finish the BMRE project as soon as the political and economic climate improves.
