BSEC forms body to probe Familytex’s irregularities

The stock market regulator has formed a two-member inquiry committee to investigate the irregularities in the sales of shares of Familytex (BD) Ltd directors without any declaration.

Bangladesh Securities and Exchange Commission (BSEC) Deputy Director Mohammad Rakibur Rahman and Assistant Director Md Sirajul Islam are members of the committee.

The committee – formed a few years after the irregularities took place – will submit its report within 30 working days to the commission.

The commission formed the committee to know the company's actual business scenario as well as that of the shareholding of the sponsors and directors.

Sources said the company's sponsors and directors started selling shares in 2015 without any declaration. In 2017, they had sold 41% of their total holdings.

On 31 December, 2018, the company's sponsors and directors held 22.43% of shares. But on 31 January, 2019, their shareholding came down to 4.02%.

Sponsors and directors held 45.16% of shares when the company raised capital through an initial public offering in 2013. That year, the company issued 100% bonus shares. As a result, the number of shares held by sponsors and directors became almost double. 

Managing Director Mohammed Morshed sold around two crore shares through declaration first.

But after that, the board of directors sold 11 crore shares without any declaration. At the time, the company's share price was Tk15 each.

Korean citizen Jun Kyung Won, a sponsor of the company, sold 4.19 crore shares within 2015 in the same way.

Later, Chairman of the company Roksana Morshed sold 92.40 lakh shares within 2016 while the present chairman, Meraj‐E‐Mostafa, sold about 1.5 crore shares that year, sources said.

Over the years, the stock market regulator could not take any stern action against the company's sponsors and directors for these irregularities.

But the present commission fined C&A Textiles Ltd for selling shares without any declaration. Roksana is the managing director of the company.

The commission also asked the Bangladesh Bank to freeze all bank accounts of all directors, including the managing director, of C&A Textiles.

The board of directors of Familytex did not recommend any dividend for shareholders for fiscal year 2019-20. That year, the company's net loss was Tk5.33 crore, up 90% compared to the previous fiscal year.

Also, the net revenue of the company was Tk62.23 crore that year.

Its current paid-up capital is Tk354.16 crore.

In July 2003, Familytex was established as an 100% export-oriented joint venture firm in Chattogram Export Processing Zone.

The company was listed on the stock exchanges in 2013 and raised Tk34 crore through an initial public offering.

Its shares at the Dhaka Stock Exchange traded for Tk2.90 each on Monday.

BSEC sources said the commission is presently working on numerous issues for the capital market's development. For example, Z category companies' restructuring, 30% shareholding rule compliance and Over-The-Counter (OTC) firm activities are going on.