B Mirror Report : Among the few listed leasing companies in the stock market that were operational, Lankabangla Finance is one. However, the company has faced loan irregularities, resulting in a large portion of its loans becoming non-performing. The company has also experienced significant capital shortfall, yet its management reported a profit of Tk 0.51 per share in 2024, instead of acknowledging the actual loss of Tk 7.41 per share.

According to the 2024 financial statements, due to irregularities in loans, the company incurred a loss of Tk 399.14 crore (Tk 7.41 per share). Despite this, the management reported a net profit of Tk 27.36 crore (Tk 0.51 per share) for the same year.

Industry experts say that in Bangladesh, banks often lend short-term deposits from customers as long-term loans, which has become a harmful practice. Political influence has further allowed non-existent or unqualified institutions to misuse thousands of crores in loans. The situation is even worse for leasing companies, most of which are struggling to survive. These companies are unable to return deposits to customers, leaving depositors in distress.

In 2024, Lankabangla Finance reported a net profit of Tk 0.51 per share (Tk 27.36 crore) and net assets of Tk 987.15 crore (Tk 18.32 per share). However, the audit report revealed a capital shortfall of Tk 426.50 crore as of December 31, 2024. The company presented inflated assets, profits, and equity without addressing the shortfall and understated liabilities.

Due to insufficient profit, Bangladesh Bank allowed the company to defer capital formation, but this does not align with international accounting standards, as the company will eventually need to form this huge capital, showing the effect in the future—a misleading practice toward investors.

According to accounting standards, the company should have formed Tk 426.50 crore in capital in 2024. If it had done so, the loss would have been Tk 399.14 crore (Tk 7.41 per share). With proper capital formation, the company’s net assets would have dropped from Tk 987.15 crore to Tk 560.65 crore (Tk 10.40 per share).

To show artificial profits in 2024, Lankabangla Finance did not form the Workers’ Profit Participation Fund (WPPF) according to labor law requirements, the financial statements revealed.

The auditor also reported that the company’s total loans amounted to Tk 6,149.52 crore, of which Tk 844.64 crore (14.74%) are non-performing.

Attempts to contact CFO Shamim Al Mamun and Company Secretary Masum Ali for comments were largely unsuccessful. Masum Ali could not be reached by phone or WhatsApp, and although CFO Shamim Al Mamun spoke on January 7, 8, and 12 promising to provide a statement, no response was received by the time the report was published. A WhatsApp call on January 13 was not answered, and no callback was made.

Lankabangla Finance was listed on the stock market in 2006 with a paid-up capital of Tk 538.84 crore, of which 68.24% is owned by investors (excluding promoters/directors). As of Wednesday, January 14, the company’s share price stood at Tk 12.40.