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Fu-Wang Foods Financial Woes, NBR orders Money Seizure

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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.

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Bearish Trend on DSE

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Dhaka Stock Market DSE, Bourse on the last working day of the week, 18th July, ended with a drop in Indices and Turnover from the previous working session. This information is known from DSE sources.

391 crore 52 lakh taka shares were traded on this day. 192 crore 89 lakh less tradings were done in DSE today compared to the previous workday, July 16th, Shares worth Tk 662 crores 24 lakh shares were traded last time, Tuesday.

The benchmark DSEX decreased 36.64 points or 5,446 The Shariah-based index DSES dropped 10.43 points or 1,191 and the blue-chip index DS30 lost by 8.10 points or 1,953.

Of the issues traded, 38 advanced, 311 declined and 46 remained unchanged.

Techno Drugs Limited ranked top gainer on DSE, the share price increased by Tk 3.10 paisa or 9.72 percent. On this day, the share was last traded at Tk 35.00 paisa.

BD Thai Aluminium Limited ranked top loser on the DSE, the share price dropped by Tk 0.60 paisa or 3.00 percent. On this day, the share was last traded at Tk 19.40 paisa.

DSE topped on trade is Sea Pearl Beach Resort & Spa Limited 15 crore 86 lakh takas of company shares have been traded.

A total of 31 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 6 lakh 61 thousand 203 shares of the companies were traded. The financial value of which is 31 crore 82 lakh taka

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Asian markets drop with Wall St as Biden sparks fresh chip fears

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Asian markets sank with Wall Street on Thursday after a warning from the White House that it would target firms supplying China with key semiconductor technology, and Donald Trump’s comments on crucial chip supplier Taiwan.

The dollar remained subdued following its latest retreat caused by growing expectations that the Federal Reserve will cut interest rates at least once this year.

Firms linked to artificial intelligence have led a surge in equities this year as investors see the sector as the next major growth area, with market darling Nvidia piling on more than 140 percent since the start of the year.

The industry has helped push the S&P 500 and Nasdaq to multiple records in the past seven months, helped by the prospect of lower borrowing costs.

But the rally took a blow Wednesday when Bloomberg News reported that Joe Biden was looking at imposing strict curbs on firms such as Tokyo Electron and ASML if they continue allowing Beijing access to their chip tech.

The report, which comes as he looks to buttress his credentials as strong on China ahead of November’s presidential election against Trump, sent shivers across trading floors, sending the Philadelphia Semiconductor Index plunging nearly seven percent — its heaviest loss since 2020.

Nvidia dived more than six percent and Dutch firm ASML collapsed more than 12 percent.

Tokyo Electron fell 7.5 percent on Wednesday and a further 9.5 percent Thursday. TSMC shed more than three percent in Taipei.

Meanwhile, Trump’s comments that Taiwan — home of the key chip-maker TSMC and other major producers — should pay the US for its defence caused some geopolitical unease.

The fear fuelled a sell-off across Asian equities, with Tokyo and Taipei down at least two percent, while there were also hefty losses in Hong Kong, Shanghai, Sydney, Seoul, Singapore and Manila.

Analysts warned that the imposition of more chip restrictions could fuel further selling and lead to a correction in markets, which some warn have become overbought.

– ‘A big currency problem’ –

Worries over tech have offset the feel-good mood that has been sparked by recent data and comments from Fed officials indicating they are ready to cut interest rates as soon as September, and possibly again before January.

The latest boost for doves came in the central bank’s Beige Book summary of the economy, which said there were signs it was slowing.

“Expectations for the future of the economy were for slower growth over the next six months due to uncertainty around the upcoming election, domestic policy, geopolitical conflict, and inflation,” the report said.

The prospect of lower rates has weighed on the dollar, while the yen — which has been battered against the greenback this year — has won support from bets on a Bank of Japan hike in coming months.

“Markets are pricing in the Fed to start cutting rates in September, and risks of yen carry trade — the practice of borrowing low yielding currencies to invest in high yielding currencies — unwinding are building as yield gap narrows,” Saxo researchers said in a note.

“Recent comments from Trump have also hinted at concerns from US dollar strength.”

Trump, in Milwaukee for the Republican National Convention, has also weighed in on the dollar’s relative strength against the yen and yuan, telling Bloomberg Businessweek “we have a big currency problem” and “I would always notice they fought very hard to keep their currency low”.

Taylor Nugent, at National Australia Bank, said: “The comments play to the view (that) bilateral trade deficits and currency valuations are a key focus, and tariffs would be a key negotiating tool.”

Investors are keeping tabs on Beijing, where China’s leaders are expected to wrap up a key gathering, with hopes President Xi Jinping will unveil fresh measures to boost the world’s number two economy.

– Key figures around 0300 GMT –

Tokyo – Nikkei 225: DOWN 2.0 percent at 40,277.86 (break)

Hong Kong – Hang Seng Index: DOWN 0.5 percent at 17,652.42

Shanghai – Composite: DOWN 0.6 percent at 2,944.67

Pound/dollar: DOWN at $1.3007 from $1.3012 on Wednesday

Euro/dollar: DOWN at $1.0938 from $1.0941

Dollar/yen: DOWN at 155.92 yen from 156.33 yen

Euro/pound: UP at 84.09 pence at 84.07 pence

West Texas Intermediate: UP 0.7 percent at $83.39 per barrel

Brent North Sea Crude: UP 0.5 percent at $85.49 per barrel

New York – Dow: UP 0.6 percent at 41,198.08 (close)

London – FTSE 100: UP 0.3 percent at 8,187.46 (close)

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LafargeHolcim reveals their Q2 Financials

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One of the listed companies, LafargeHolcim Bangladesh Limited discloses its financial reports for the second quarter, (April – June 24).

The company’s Consolidated earnings per share (EPS) Tk 1.14 paisa in Q2 of the current financial year (April – June 24). Consolidated EPS was Tk. 0.69 for January-June 2024 as against Tk. 1.47 for the same period last year. EPS  was Tk 0.80 paisa during the same period last year. Consolidated NAV per share was Tk. 16.60 as of June 30, 2024.

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