Sonargaon Textiles, a listed company facing persistent losses and concerns over its ability to continue operations, has seen a sharp rise in its share price in recent months despite its weak financial condition.
According to Dhaka Stock Exchange data, the company’s share price rose Tk57.20 over the past six months to Tk94.90, nearly doubling during the period.
The Chittagong Stock Exchange sought an explanation from the company on August 3 after an unusual rise in its share price and trading volume. In response, Sonargaon Textiles said it had no undisclosed price-sensitive information that could have influenced the price or trading activity.
The company, however, remains loss-making. It reported a loss per share of Tk0.19 in the first nine months of fiscal 2025-26. It also incurred losses in four of the six fiscal years between 2019-20 and 2024-25.
Its audited financial statements for FY2024-25 showed an accumulated loss of Tk15.85 crore, while the company incurred a loss of Tk2.13 crore during the year. The auditor raised concerns over the company’s ability to continue its normal operations.
The company also faces legal action from Bangladesh Development Bank, Rupali Bank and Mutual Trust Bank over loan recovery. Sonargaon Textiles is seeking waivers of interest on the loans.
The auditor also raised questions about the existence and verification of assets reported in the financial statements. The company reported inventories worth Tk54.99 crore and fixed assets worth Tk68.45 crore as of June 30, 2025, but the auditor could not verify their existence through physical inspection or alternative procedures.
The auditor was also unable to verify purchases of raw materials worth Tk14.07 crore during the year, as a significant portion was reportedly purchased in cash outside banking channels and sufficient supporting evidence was unavailable.
The company also has undistributed dividends from 2019 and 2022 totalling Tk15 lakh that, according to the audit report, had not been transferred to the Capital Market Stabilization Fund or kept in a separate bank account as required.
In addition, Tk10 lakh allocated to the Workers’ Profit Participation Fund had not been distributed, the audit report said.
Sonargaon Textiles, listed on the stock market since 1995, has paid-up capital of Tk26.47 crore. Investors outside the sponsor and director group hold 55.55% of its shares.
