B Mirror Report: Lub-Ref Bangladesh used the book-building process on the stock market to raise a huge Tk 150 crore from investors at a premium, stating it was for business expansion. To get this enormous cash, the corporation, however, deceived investors by displaying fictitious assets and profits.

These fake numbers have not yet been accounted for by Lub-Ref authority. The directors allegedly utilized the nearly hundreds of crores of IPO cash that vanished under the guise of buying fictitious assets to purchase several apartments in Basundhara, Dhaka, as well as for personal expenses, including money laundering in Singapore.

The company’s board is chaired by Rubaiya Nahar, with her husband Mohammad Yusuf serving as Managing Director. Their two children, Md. Salauddin Yusuf and Dr. Israt Jahan, are shareholder directors on the board.

Lub-Ref Bangladesh entered the stock market in 2021 through the controversial issue manager, NRB Equity Management. At the beginning of that year, the company raised Tk 150 crore from the market. According to the prospectus, Tk 46 crore was to be used for loan repayment, Tk 6 crore for IPO expenses, and Tk 98 crore for purchasing and installing machinery.

However, the company later admitted in its IPO fund utilization report that out of the Tk 98 crore, Tk 85 crore was actually used for machinery, land development, and civil construction, while financial statements for the 2024–25 fiscal year indicated that work was “ongoing” to make these assets usable (capital work-in-progress). Auditors, however, could not verify the existence of these assets on the ground.

Accountant Monowar Hossain told Media  that if a company claims IPO funds are being used for ongoing projects but auditors cannot verify their existence, it implies the money was embezzled without carrying out the stated work. In short, the funds were misappropriated under the guise of purchasing fake assets.

Abul Kalam, director and spokesperson of the Bangladesh Securities and Exchange Commission (BSEC), told Media  that the commission would not tolerate any misuse of IPO funds. The BSEC will scrutinize Lub-Ref’s case and take strict action if any irregularities are found. Investors’ money will not be allowed to be embezzled.

It has been revealed that a fraudulent network led by Managing Director Mohammad Yusuf misappropriated investors’ huge funds for fake asset purchases to benefit themselves. As a result, the company is now barely surviving. This network bought multiple flats in Basundhara in the names of the directors and also laundered a significant portion of the money through Yusuf’s daughter residing in Singapore. Yusuf’s son-in-law, Alamgir Kabir, former chairman of Southeast Bank, reportedly assisted in this scheme.

Before entering the IPO, Yusuf’s group, with the help of NRB Equity Management’s controversial figure Kazi Saifur Rahman, issued many fake placement shares, part of which went to Saifur’s network, while others were held in Yusuf’s group’s name. This has left investors severely disadvantaged. The company issued shares at Tk 30 during the IPO, but the current market price has fallen to Tk 9.20.

At the time, a BSEC executive director had warned that the company’s financials were problematic and that it was not eligible to receive a premium. Nevertheless, unethical transactions allowed the company to raise funds from the stock market.

Media reports and the BSEC executive director’s earlier warnings have now been confirmed by the 2024–25 fiscal year audit.

Auditors reported that while the company claimed to have Tk 584.40 crore in fixed assets as of June 30, 2025, on-site verification with the shift engineer found only Tk 114.92 crore of assets.

Lub-Ref’s deception did not stop there. The company showed fake assets without any ongoing construction or capital work-in-progress, claiming IPO funds were being used for projects, while in reality the money was misappropriated.

As of June 30, 2025, the company reported Tk 212.26 crore as capital work-in-progress for new projects funded by the IPO. Of this, Tk 46.73 crore was claimed as completed in 2024–25. However, the company could not provide auditors with supporting documents or books of accounts.

Auditors visited existing factories and the Julda project to verify these claims but found no construction or work-in-progress, indicating the IPO money had been embezzled using fake project expenditures.

Auditors also noted that Tk 5 crore of routine expenses had been falsely shown as capital work-in-progress, while it should have been recorded as an expense in the profit and loss statement.

The auditors reported that out of the IPO funds raised in January 2021, Tk 13.10 crore remained unutilized, which had been kept in the now-defunct Social Islami Bank. This amount has grown to Tk 19.87 crore and is now risky to recover. Additionally, the long delay in using the funds constitutes a serious violation of the prospectus.

As of June 30, 2025, the company had declared unpaid dividends of Tk 15.92 crore, including Tk 1.42 crore for 2023–24, which had not been paid.

The financial statements also show Tk 14.30 crore in liabilities to other creditors as of June 30, 2025, carried over from the previous year. The company did not provide auditors with ledgers or creditor addresses, preventing verification. Auditors requested three months of ledgers as an alternative check, which the company also failed to provide. Consequently, the authenticity of Tk 14.30 crore could not be verified.

The company reported Tk 24.33 crore spent on raw materials and packaging in 2024–25, but according to VAT 9.1 records, the actual purchase was Tk 31.75 crore.

Lub-Ref Bangladesh entered the stock market in 2021, showing a per-share profit of Tk 2.56 in 2019–20. Its book-building cutoff price was Tk 30, but ordinary investors received shares at Tk 27.

In 2024–25, the company’s per-share loss was Tk 4.56. No dividend was declared for shareholders. In 2023–24, the company had a smaller loss per share of Tk 0.74 and declared a 1% cash dividend, following a 2% dividend in 2022–23. However, even these nominal dividends were not properly paid, prompting complaints to the BSEC.

Earnings per share (EPS) fell from Tk 3.41 in 2020–21 to Tk 2.13 in 2021–22, and further down to Tk 1.41 in 2022–23.

On January 7, the reporter contacted company secretary Kabir Hossain, speaking intermittently until January 27. Initially, he cited family and other problems with the MD, but promised written comments, which were never received. On February 1, MD Mohammad Yusuf said he would review the secretary’s submission but later did not respond.

The company claimed to have spent Tk 49.36 crore on developing 5.5 crore acres of land to raise IPO funds. Auditors found none of this development during on-site inspection. In Chattogram, the company’s office and factory occupy 100% of the land, leaving no scope for development beyond interior paths. Some paddy land was purchased near the river for construction, where some funds were spent.

Beyond these areas, no significant land development expenses exist. However, the company inflated its assets by claiming Tk 49.36 crore in development work instead of the actual Tk 5 crore used.

Lub-Ref authorities claimed to have used Tk 3.53 crore in bricks, Tk 4.29 crore in cement, Tk 4.64 crore in iron, Tk 3.10 crore in piling, and Tk 3.34 crore in labor for development—none of which existed in reality.

At the time of the IPO, a BSEC executive director had stated that Lub-Ref Bangladesh was not eligible for a premium and had come to the book-building process with artificial assets. Many other issues existed, and the company would not be able to pay dividends 2–4 years after the IPO, as predicted.