Stocks
Fu-Wang Foods Financial Woes, NBR orders Money Seizure
A directive has been issued to seize the bank accounts held by Fu-Wang Food Limited, a company listed on the stock exchange. This directive was issued by the National Board of Revenue (NBR) to a private bank. It is reported that the order was issued by the Deputy Commissioner of Taxes in Dhaka Tax Zone-15.
For the past several years, Fu-Wang Food Limited has been in arrears, and despite multiple directives for payment, the company has not complied with government orders. In light of this situation, the authorities have decided to seize an equivalent amount of the company’s outstanding taxes.
From the fiscal year 2016-17 through 2021-22, Fu-Wang Food has not paid its due taxes. During this six-year period, the company’s outstanding tax liability has accumulated to Tk 4 crore 82 lakh 76 thousand 387. Among these arrears, Tk 74 lakh 43 thousand 184 was accumulated in 2016-17, Tk 11 lakh 64 thousand 402 in 2017-18, Tk 46 lakh 54 thousand 282 in 2018-19, Tk 65 lakh 71 thousand 820 in 2019-20, Tk 1 crore 71 lakh 47 thousand 93 in 2020-21 with interest, and Tk 1 crore 12 lakh 95 thousand 606 in 2021-22 with interest.
According to sources, the bank account operated by Fu-Wang Food has been asked to deposit the amount equal to the tax due to the tax office. On October 9, the Deputy Tax Commissioner of Region-15. Ruhul Amin gave this order. A letter regarding the instructions has been sent to the head of the Banani branch of the private bank.
The letter stipulates that as the taxpayer company, Fu-Wang Food Limited, has not yet settled the outstanding tax amount of BDT 4 crore 82 lakh 76 thousand 387 (Four Crore Eighty-Two lakhs seventy-six thousand three hundred eighty-seven taka only), the provisions of Section 221 of the Income Tax Act 2023 are being invoked that you are obligated to make immediate payment to the concerned party, or in the case where the amount is not currently payable, to make the payment only when you are rightfully entitled to that amount. If the amount payable to the party is less, you are directed to pay the community the specified sum. If you fail to make this payment, the amount payable, the right to it, or the excess amount, if any, should be settled directly with me.
In addition, it is further stated in the notice that this directive to seize funds is applicable to any financial disbursement made by the taxpayer company’s owners or any entity under their ownership. This shall be taken into account and the respective taxpayer shall be responsible for making payments equivalent to the amount of money mentioned on the receipt I receive after receiving the funds, in accordance with the relevant Income Tax Act of 2023. If, even after receiving this notice, you fail to make the due payments to the respective taxpayer, or if the amount paid by the defaulter to you is less than what should be, you will be held personally responsible for the tax due, and the difference amount shall be settled as per the Income Tax Act.
To shed more light on this matter, Mia Mamun, the director of Fu-Wang Food, explains that they faced significant tax and VAT issues left behind by the previous owner, amounting to 50 to 60 crore Taka. They expressed their inability to pay such a substantial amount to the National Board of Revenue (NBR). However, NBR has since withdrawn its claims. Regarding the outstanding tax, they plan to negotiate with the previous owner to resolve the matter as the previous owners are liable for the unpaid taxes. If they fail to fulfill their tax obligations, efforts will be made to reduce the burden on the company.
Notably, it is pertinent to mention that with the involvement of the alleged Japanese entity, Minori Bangladesh, in the ownership of two listed companies on the country’s stock exchange, Fu-Wang Foods and Emerald Oil Industries, there have been controversies surrounding the increase in the companies’ share prices. Primarily, allegations of price manipulation have been raised against Mia Mamun Syndicate, creating concerns within the market. Already, the NBR has issued a directive for tax recovery from Fu-Wang Foods. Additionally, Basic Bank Limited has announced the sale of all assets of Emerald Oil Industries.
Dhaka Stock Market DSE, Bourse on the last working day of the week, 19th September, ended with a hike in Indices and Turnover from the previous working session. This information is known from DSE sources.
594 crore 77 lakh taka shares were traded on this day. 41 crore 11 lakh less tradings were done in DSE today compared to the previous workday, 18th September, Shares worth Tk 553 crores 65 lakh shares were traded last time, Wednesday.
The benchmark DSEX added 41.13 points or 5,735 The Shariah-based index DSES gained 12.13 point or 1,257 and the blue-chip index DS30 increased by 29.46 points or 2,106.
Of the issues traded, 150 advanced, 191 declined and 56 remained unchanged.
SK Trims Limited ranked top gainer on DSE, the share price increased by Tk 1.50 paisa or 8.57 percent. On this day, the share was last traded at Tk 19.00 paisa.
Hami Industries PLC ranked top loser on the DSE, the share price dropped by Tk 9.80 paisa or 9.40 percent. On this day, the share was last traded at Tk 94.50 paisa.
DSE topped on trade is grameenphone Limited 31 crore 47 lakh takas of company shares have been traded.
A total of 33 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 70 lakh 41 thousand 263 shares of the companies were traded. The financial value of which is 49 crore 16 lakh taka.
Tokyo’s Nikkei led Asian markets higher Thursday as the yen hit a two-week high after the Federal Reserve announced a bumper interest rate cut and pledged a series of further reductions that boosted sentiment.
After a keenly awaited meeting the US central bank decided to lower borrowing costs for the first time since the start of the pandemic by opting for a half-point reduction.
However, the bigger of two options — some had expected a 25-basis-point cut — split opinion, with some warning it could reignite inflation while others said it showed the bank was keeping ahead of the curve in supporting the economy in light of weak jobs data.
The bank’s “dot plot” guidance indicated another 50 points of reductions before January, followed by 100 next year and 50 in 2026.
After the meeting, Fed boss Jerome Powell said the economy was in “good shape” pointing to lower inflation and solid growth.
“The labour market is in a strong place. We want to keep it there,” he told reporters.
But he cautioned that the central bank would “go carefully” and weigh the matter “meeting by meeting” as it looks to keep easing.
“It is time to recalibrate our policy to something that is more appropriate, given the progress on inflation, and on employment moving to a more sustainable level.
“This is the beginning of that process.”
Equities have rallied through the year on expectations the cycle of tightening, which started in 2022, would come to an end this year as inflation slows and the labour market softens.
But, after an initial burst higher following the announcement — pushing the S&P 500 to a new record — Wall Street retreated and ended in the red.
Analysts pointed out that investors had largely factored in 125 points of reductions this year, so a correction in valuations was to be expected.
Christian Hoffmann at Thornburg Investment Management said: “Considering the one dissenting voice from a governor… the Fed must have grappled with concerns not just about doing too much versus too little, but also concerns about signalling to markets, and perhaps more subtly, political optics and legacy considerations.
“The setup for this meeting was not ideal. With the market almost evenly split between a 25 basis point and 50 basis point cut, hopes were bound to be dashed. On top of that, US equity indices rallied nearly every day last week and are flirting with all-time highs and elevated valuations.”
Asian markets brushed off the weak US lead and mostly rose, with Tokyo piling on more than two percent as exporters were boosted by a weaker yen, which hit almost 144 per dollar, a level last seen at the start of the month.
That was just days after breaking below 140 for the first time since last summer.
There were also healthy gains in Hong Kong, where the de facto central bank lowered its own rates owing to the city’s currency peg to the dollar, while Shanghai, Sydney, Singapore, Wellington, Taipei, Manila and Jakarta also advanced.
Investors are now turning their attention to the Bank of Japan’s policy meeting, which concludes Friday and is expected to see officials stand pat, having sent markets into turmoil last month with a surprise hike — after doing so earlier this year for the first time since 2007.
Gold was sitting around $2,550, having burst to a new record high above $2,600 as the prospect of lower rates makes the precious metal more attractive as an investment.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 2.5 percent at 37,284.43 (break)
Hong Kong – Hang Seng Index: UP 0.6 percent at 17,757.70
Shanghai – Composite: UP 0.3 percent at 2,725.31
Dollar/yen: UP at 143.61 yen from 142.29 yen on Wednesday
Pound/dollar: DOWN at $1.3182 from $1.3207
Euro/dollar: DOWN at $1.1092 from $1.1120
Euro/pound: DOWN at 84.14 pence from 84.17 pence
West Texas Intermediate: DOWN 0.8 percent at $70.37 per barrel
Brent North Sea Crude: DOWN 0.5 percent at $73.26 per barrel
New York – Dow: DOWN 0.3 percent at 41,503.10 (close)
London – FTSE 100: DOWN 0.7 percent at 8,253.68 (close)
The Bangladesh Securities and Exchange Commission (BSEC) has appointed two new independent directors to the Dhaka Stock Exchange (DSE) board, following a dispute that prevented the previous appointees from assuming their positions. Additionally, seven independent directors have been appointed to the Chittagong Stock Exchange (CSE). These decisions were made during a commission meeting held on September 18, 2024.
According to a press release from BSEC, the newly appointed independent directors for the DSE are AF Nesaruddin, partner at Hoda Vasi Chowdhury and Co., and Syeda Zakeerin Bakht Nasir, chief consultant and CEO of Z N Consultants. They will replace KAM Majedur Rahman and Helal Uddin, who were unable to take up their roles due to concerns over their appointments violating board regulations. Both individuals have since declined their positions.
The seven independent directors appointed to the CSE are Alamgir Morshed, CEO of Infrastructure Development Company; Professor Saiful Islam from BUET; AKM Habibur Rahman, former managing director of Teletalk; Professor Mahmud Hassan from North South University; M Zulfiquar Hussain, CEO of Grow n Excel; Naznin Sultana, Finance Director at Asian University for Women; and Farida Yasmin, Deputy Secretary at the Financial Institutions Division.
This reshuffling follows a political shift in early August, after which the BSEC verbally requested all independent directors from both the DSE and CSE to resign. On September 1, the BSEC had already appointed seven independent directors to the DSE, though none have yet assumed their roles.
The DSE board, as per the demutualisation scheme, consists of 13 members: seven independent directors, five shareholder directors (one representing strategic investors), and the managing director, who serves as an ex-officio member.
