Stocks
SK Trims’ Bank Accounts Frozen Amid Corruption Probe
The Bangladesh Financial Intelligence Unit (BFIU) has frozen the bank accounts of SK Trims and Industries, a publicly traded company allegedly owned by the family of former National Board of Revenue (NBR) official Matiur Rahman. This action follows court orders and a recommendation from the Anti-Corruption Commission (ACC), as disclosed today on the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) websites.
Key Figures and Investigation
Media reports indicate that MA Kaium Howlader and Md Nurul Huda, brothers of Matiur Rahman, hold significant positions in SK Trims, serving as Managing Director and Sponsor Director, respectively. The ACC is currently probing Matiur Rahman’s assets on allegations of amassing illegal wealth.
On July 11, a Dhaka court mandated the freezing of 116 bank accounts and 23 beneficiary owner (BO) accounts, along with the seizure of multiple properties belonging to Matiur Rahman and his family.
Company Disclosure and Response
In a recent disclosure, SK Trims confirmed that the Metropolitan Sessions Judge Court and the BFIU had frozen all their bank accounts based on the ACC’s recommendation. Efforts to reach Md Riaz Haider, the company secretary, and Md Nazmul Hossain, the Chief Financial Officer (CFO), for comments were unsuccessful.
According to SK Trims’ annual report for 2022-23, the company maintains over a dozen bank accounts across various banks, including fixed deposit receipts (FDRs), loans, and other accounts critical for its business operations.
Stock Market Performance and Financial Impact
SK Trims was listed on the stock exchange in 2018, raising Tk30 crore through an initial public offering (IPO) to expand its business. The company’s share price has fluctuated significantly following allegations against Matiur Rahman. From Tk27.6 per share on June 20, it fell to Tk24.4 on July 2, then briefly rose to Tk27 on July 9, before declining again, closing at Tk24.8 on the DSE yesterday.
Business Operations and Investments
SK Trims specializes in manufacturing various products for the export-oriented garment industry, including sewing thread, elastic, poly, cartons, photo cards, backboards, barcodes, hang tags, tissue paper, and gum tape.
The company has invested Tk17 crore in seven companies as of June 30, 2023. Among these, Dominage Steel Building Systems, Mamun Agro Products, Acme Pesticides, and Asiatic Laboratories are listed on the bourses, while Anik Trims, B Brothers, and Banbiz (Pvt) remain non-listed. It is unclear whether SK Trims has sold or still holds shares from these investments.
Revenue and Profit Growth
SK Trims reported a 40% increase in revenue to Tk92 crore for the first nine months of the 2023-24 fiscal year, with net profit soaring by 86% to Tk8.81 crore. These figures surpassed the company’s annual revenue and profit of Tk88.75 crore and Tk7.97 crore, respectively, for the 2022-23 fiscal year. The company paid a 3% cash dividend to its shareholders in FY23 and its shares are currently trading in the B category.
As of June 30, sponsor-directors held 31.23%, institutional investors 28.86%, and the general public 39.91% of the company’s shares.
Industry Concerns
Ziaur Rahman, General Secretary of the Benapole Landport Importers and Exporters Association, expressed concerns over the significant losses traders face with perishable food products due to halted trade services. “Since the goods trucks cannot enter after the evening, the trade deficit will increase,” he noted.
One of the Listed companies, National Polymer Limited has recommended 10.50% Cash Dividend for the year ended June 30, 2024.
It has reported Consolidated EPS of Tk 2.27 paisa, and Consolidated NAV per share of Tk 30.63 for the year ended March 31, 2024.
The Annual General Meeting (AGM) of the company will be held on December 18, through the digital platform. The record date for this has been fixed at October 22.
The Company also discloses its financial reports for the second quarter, (April – June 24).
As per the company’s consolidated life revenue account for April to June 2024, the excess of total income over total expenses, including claims (surplus), stood at Tk 1,394.24 million. This marks a significant increase from the surplus of Tk 823.68 million during the same period in 2023.
For the first half of 2024, from January to June, the company reported a surplus of Tk 2,177.57 million, compared to Tk 1,290.39 million in the corresponding period of the previous year.
Additionally, the Life Insurance Fund balance as of June 30, 2024, reached Tk 55,188.62 million, showing a net increase of Tk 5,892.25 million from Tk 49,296.37 million on June 30, 2023.
One of the Listed companies, Beacon Pharmaceuticals PLC has recommended 20% Cash dividend and 10% Cash Dividend to Sponsor Shareholder and Directors for the year ended June 30, 2024.
It has reported EPS of Tk 2.26 paisa, and NAV per share of Tk. 26.37 for the year ended June 30, 2024.
The Annual General Meeting (AGM) of the company will be held on December 23, through the digital platform. The record date for this has been fixed at October 27.
The Bangladesh Securities and Exchange Commission (BSEC) has removed three audit firms from its panel for their failure to secure enlistment with the Financial Reporting Council (FRC), according to a notice issued today.
The firms—A Hoque & Company, FAMES & R, and SK Barua & Company Chartered Accountants—were delisted following the FRC’s request. In December last year, the FRC published a list of enlisted audit firms and subsequently, in February, requested the BSEC to remove any firms that were not included on that list.
BSEC regulations mandate that financial statements signed by auditors outside its approved panel will not be accepted. With the removal of these three firms, the total number of audit firms on the BSEC panel has been reduced from 48 to 45.
Sources from the FRC revealed that 15-20 audit firms failed to secure enlistment last year, and approximately 45 chartered accountants are currently under restrictions imposed by the Institute of Chartered Accountants.
Although the delisted firms can no longer audit issuer companies or listed securities, they are allowed to complete audit and assurance services that were initiated before their removal, the BSEC clarified.
