Simtex Industries Limited, a company listed on the stock exchange, is facing allegations of money laundering. The accused, PK Haldar, who is currently in custody in India, is accused of engaging in financial irregularities on behalf of the Simtex Industries. The founder of the organization, Md Siddiqur Rahman, is said to be a close friend and trusted collaborator of PK Haldar. These claims have also been mentioned in a recent investigative report by the Bangladesh Securities and Exchange Commission (BSEC), which highlighted the involvement of Siddiqur Rahman and Simtex Industries. BSEC also found irregularities in the appointment of new chairman and director. This information is known from related sources.
According to sources, Mr. Neaz Rahman Shaqib, the current Managing Director (MD) of Simtex Industries, is the son of Siddiqur Rahman. In an attempt to secure the company’s finances, he has been sending money to PK Haldar in India through overseas investments. The investigation by BSEC has revealed this unsettling information regarding Simtex’s financial misconduct.
Recently, a probe committee has been formed by the securities regulator to investigate the irregularities of Simtex Industries. The committee members include Mohammad Ohidul Islam, an additional director of BSEC, Assistant Director Mahbubur Rahman, and Syed Mahbub Jubayer, the Deputy Manager of Dhaka Stock Exchange. The committee has already submitted their investigative report to the commission.
According to the BSEC investigation report, Siddiqur Rahman, the founder of the company, was the sole authorized signatory for the company’s bank accounts. Without any transaction limits, he had the authority to withdraw funds from the bank. Taking advantage of this opportunity, he withdrew a total of 48 crore 83 lakh taka from the bank during the 2020-2021 fiscal year. However, he only paid bills amounting to 27 crore 99 lakh taka. In other words, approximately 20 crore taka of the company’s funds remain unaccounted for.
Sources reveal that the recent audit report for the fiscal year 2022 has identified inconsistencies between the previous year’s report and the audit report. The BSEC investigation report states that the company has fabricated fake vouchers for the purpose of self-attribution. BSEC has obtained copies of 133 high-value cash cheques worth 21 crore 91 lakh taka from Trust Bank, even though Simtex Industries has submitted 2,986 vouchers.
The BSEC investigation committee has uncovered information regarding Simtex Industries’ transactions with several companies. Among them, a company called S.R. Threads & Accessories has been identified as a supplier of threads to Simtex Industries, providing approximately 30-35 lakh taka worth of thread annually. However, according to the documents submitted by Simtex Industries, they have paid S.R. Threads & Accessories a total of 2.5 crore taka in cash for the year 2022. Additionally, they have made an additional payment of 9 lakh 78 thousand taka through checks, as stated by Simtex. The BSEC investigation committee states that Simtex Industries created fabricated vouchers for the purpose of self-adjustment of funds.
Furthermore, another company named S.M. Plastics has provided information regarding cash and bank payments totaling 74 lakh 19 thousand taka for supplying plastic to Simtex Industries. Among these payments, 19 lakh 81 thousand taka was made in cash, while 54 lakh 38 thousand taka was made through bank checks, as informed by Simtex Industries. However, Simtex Industries has informed BSEC that they have paid the entire amount of 19 lakh 81 thousand taka in cash through the medium of fabricated vouchers.
In addition to these findings, the BSEC investigation has revealed irregularities in the appointment of the current chairman and two directors of Simtex Industries. The investigation committee states that the appointment of the chairman was not on the agenda of the management council meeting. Simtex’s Managing Director Neaz Rahman unexpectedly presented the matter in that meeting. Furthermore, contrary to BSEC’s directive, two individuals were appointed as directors, each holding 2.36% shares instead of the mandatory minimum of 2% shares. BSEC says Simtex Industries has violated commission orders in appointing chairman and director.
The Bangladesh Securities and Exchange Commission (BSEC) has issued orders to seize SIMTEX Holdings as part of an investigation into fraudulent activities involving its Managing Director, Mr. Siddiqur Rahman, his wife Mahfuza Rahman, their two sons Neaz Rahman Sakib (current CEO of SIMTEX), and Istiaq Rahman Imran, and his brother Mr. Ensan Ali Sheikh. Additionally, the court has imposed a travel ban on Mr. Siddiqur Rahman and his wife, Mahfuza Rahman.
The BSEC investigation report further highlights a decline in Simtex Industries’ profits. In the fiscal year 2015-16, during their inclusion in the stock market, Simtex’s net profit was approximately 10%. However, in the previous fiscal year, it dropped to 5.57%.
Regarding these matters, Mr. Asim Kumar Saha, the Company Secretary of Simtex Industries, urged Orthosongbad to contact their office during working hours for any inquiries. After a brief conversation, he disconnected the call.
To gain more insights into the situation, Orthosongbad contacted Professor Abu Ahmed, an expert in the stock market. He stated that the BSEC possesses various powers to take action against companies involved in irregularities. They have the authority to initiate investigations and file cases. It is appropriate for the BSEC to look into any irregularities in other companies as well.
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For additional information, Mohammad Rezaul Karim, the Executive Director and Spokesperson of the Bangladesh Securities and Exchange Commission told Orthosongbad , that if the investigation committee recommends action against Simtex Industries, the commission will review it. If substantiated allegations are found against the company, the BSEC will take necessary measures as per the securities law.
