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TUESDAY, JUNE 10, 2025
Scam-hit Industrial Finance Company to hold AGM after four years

Economy

Rafiqul Islam
14 September, 2022, 10:05 pm
Last modified: 14 September, 2022, 11:28 pm

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Scam-hit Industrial Finance Company to hold AGM after four years

The NBFI, which has around 97% of its loans defaulted due to irregularities in its disbursement process, could not hold any AGM since 2018

Rafiqul Islam
14 September, 2022, 10:05 pm
Last modified: 14 September, 2022, 11:28 pm
Infographic: TBS
Infographic: TBS

Bangladesh Industrial Finance Company (BIFC), a non-bank financial institution (NBFI) saddled with massive defaulted loans and losses, is going to hold its annual general meeting (AGM) after four years.

The NBFI, which has around 97% of its loans defaulted due to irregularities in its disbursement process, could not hold any AGM since 2018.

The pending AGMs of 2018 and 2019 will be held on 29 November as it has received an order from the High Court in this regard.

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According to the company data, it has incurred massive losses in the years when AGMs were not held.

In 2018, the financial institution incurred a loss of Tk131 crore. In the previous year, it experienced the highest loss of around Tk700 crore.

In 2017, BIFC had to maintain a provision of Tk608.85 crore after it declared all of its disbursed investments defaulted, resulting in massive losses.  

Upon a High Court order, the company had earlier set 17 May of this year to hold the pending AGM of 2018, but seven days before the meeting, it said in stock exchange filings that the schedule has been postponed due to unavoidable circumstances.

As per its 2018 financials, the company was in profit till 2014 but faced a liquidity crisis for years since 2016.

Incorporated in 1996, BIFC plunged into a crisis mainly for investing in loss-making companies and due to its failure to ensure scrutiny before disbursing loans.  

According to its officials, the company invested in Bangla Lion, and GMG Airlines from which it did not get any return and the capital investment became uncertain.

The NBFI had extended loans and credits to many individuals, and companies without making appropriate evaluations and analyses.

Many of the loans and credits are not covered by collateral while some of them are fake, fictitious and not traceable.

BIFC disbursed a Tk814.04 crore loan till June 2021, of which Tk774.12 crore or more than 95% got defaulted.

However, Tk772 crore of the defaulted loan is uncollectible as most of the borrower companies exist only on paper.

According to sources, several companies, such as Sunman Group owned by Major (retd) Abdul Mannan who is the former chairman of BIFC, are among the big defaulters of the institution.

Earlier this year, Abdul Mannan and his wife were questioned by the central bank's inquiry committee over allegations of irregularities.

The company's retained earnings have been negative due to heavy losses every year. As per the unaudited financial statements as of September 2020, the negative retained earnings amounted to Tk1,141 crore.

Listed on the capital market in 2007, the company paid dividends till 2013. It could not pay cash dividends even once and had issued bonus shares every year.

Since 2013, the shareholders of the company have not received any dividends.

As of August 2022, the sponsor-directors held 40.55%, institutional investors 41.77% and general investors 17.68% of the company's 100,679,944 shares.

Currently, the share price of the company is below the face value. Each share was priced at Tk9.5 on Wednesday.

Earlier, the price of each share rose from Tk6.2 in July to Tk12.7 on 4 August.

Bangladesh / Top News / Industry

Bangladesh Industrial Finance Company / AGM

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