ACI Limited has given ‘illogical’ and ‘unacceptable’ reply to a Dhaka Stock Exchange’s query about making continuous losses by its subsidiary company, Shwapno, said members of a DSE probe body on Sunday.
The board of directors of DSE on February 12 formed a five-member committee headed by its independent director former Supreme Court judge Siddiqur Rahman Miah to look into the Shwapno issue.
The committee members held a meeting at the DSE office premises in Dhaka on Sunday.
The DSE probe committee questioned ACI why the company was running a losing concern for so many years.
DSE director Minhaj Mannan Emon, also a committee member, told New Age that the committee had also asked ACI about its sluggish business, but the company gave them ‘illogical’ and ‘unacceptable’ answer.
He said that ACI sidestepped the DSE query by saying that the shareholders of the company at the latest annual general meeting gave their opinions that Shwapno should continue its business and expand branches across the country though it continued making losses.
‘The reply was unacceptable,’ Emon said.
The committee was supposed to submit its report with recommendations about the company on Sunday, but it felt it necessary to investigate the matter further, he said.
The committee took one more week to submit its report to the DSE board.
After that, the DSE board will send the recommendations to market regulator Bangladesh Securities and Exchange Commission for taking further action.
DSE launched the investigation into the matter after an investor lodge complaint with the bourse against ACI for showing huge losses by one of its subsidiaries, ACI Logistics Limited (brand name Shwapno), said DSE officials.
Mohammad Ali, chief executive officer of Dhaka Bank Securities, which holds shares of ACI Limited, on February 10 lodged the complaint with BSEC and DSE saying ‘the interests of the minority shareholders were jeopardised by irresponsible activities of the board of directors of ACI’.
DSE officials said Shwapno had been incurring losses every year since the inception of its business in 2008 and the losses were increasing at a rapid pace.
Shwapno, having paid up capital of Tk 36 crore, accumulated Tk 891 crore in losses in last 10 years, sucking all of the earnings of ACI Group, they said.
It posted significant losses in each year including Tk 135 crore in 2016-17 and Tk 135.1 crore in 2017-18, they said.
As a result, investors were deprived of due dividend from the company and fair market price at the stock market.
On January 29 this year, ACI declared earnings per share of Tk 0.44 for July-December of 2018 against Tk 7.72 for the same period in the previous year
because of the huge losses incurred by ACI Logistics (Shwapno).
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