In a significant development, the auditing authority, the industry Shafiq Basak & Co. a regulatory body, has raised concerns about the participation of Jute Spinners, a listed company, in the stock market. The company’s operations have been deemed risky due to the prevalence of speculative trading. In a recent report, Safik Bosak & Company highlighted the potential hazards associated with the continuous surge in speculative trading, which has resulted in an upward trend in the company’s stock. Despite being labeled as a risky venture, Jute Spinners persists in trading shares while the regulatory authority keeps a watchful eye on their activities through the Supervision Division.
Jute Spinners, despite being listed in the stock market almost four decades ago, has consistently failed to provide any returns to ordinary investors. However, the company’s share price has been increasing abnormally. The management of Jute Spinners denies any specific reason for the surge in share prices. According to the company’s secretary, A.T.M. Mostafa, even if all operations of the company were shut down, it would still have to pay a yearly loss of 6 crore Bangladeshi Taka to the bank as interest. Consequently, the rate of this loss keeps rising regularly. Investors can only speculate as to why they are purchasing shares of Jute Spinners.
Mohammad Rezaul Karim, the Executive Director and spokesperson of the Bangladesh Securities and Exchange Commission (BSEC), has stated that the BSEC’s Surveillance Department is investigating the current surge in the share price of a particular company. Our investigation has revealed that the price has been consistently rising since the purchase of more than 60,000 shares from a single individual account. We are looking into this matter and will take legal action if any irregularities are found. The decrease in the company’s paid-up capital has resulted in a reduced number of shares, leading to a sudden increase in share prices for investors. Previously, the company had also been under scrutiny due to artificial price escalation. The BSEC is closely monitoring the situation.
Al-Amin, a financial analyst and Assistant Professor at Dhaka University stated to Orthosongbad that even though a company is publicly listed, if there is information available that indicates the organization will generate profits, individuals may choose to invest in its shares. Furthermore, if the paid-up capital is low, it could be a cause for concern. This is because there is a prevailing practice that if the paid-up capital falls below 30 crore taka, the company will be transferred to ATB platform. However, increasing paid-up capital requires compliance with the law, maintaining company reserves, generating income, and distributing dividends. Ultimately, the decision to invest lies with the individual investor.
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The sudden surge in Jute Spinners’ share price has raised concerns and questions among investors in the Dhaka Stock Exchange. The company’s financial instability, lack of profitability, and excessive reliance on loans have contributed to the prevailing uncertainty surrounding the company’s future prospects.
