Al-Haj Textile surges despite no dividend declaration

Al-Haj Textile Mills has decided not to pay any dividend to its shareholders for the fiscal 2022-23 due to losses incurred during the year.  

Despite this declaration, announced in a disclosure yesterday, its shares rose by 3.92%, reaching Tk121.90 on the Dhaka Stock Exchange (DSE).  

Market insiders attributed the rise in share prices to a positive development within the company, which had previously experienced disputes among its sponsor-directors.  

The textile manufacturer had paid a 3% cash dividend in FY22 and a 1% cash dividend in FY21. However, it did not pay any dividend in FY20 due to losses.  

In FY23, it incurred a loss of Tk1.70 crore, compared to a net profit of Tk2 crore in the previous year. As of the end of FY23, its loss per share stood at Tk0.78.  

To secure shareholder approval for the dividend and audited financial statement, Al-Haj Textile will hold its annual general meeting on 30 January next year, with a record date set for 8 January to determine eligible attendees.  

According to a company insider, Al-Haj Textile failed to declare a dividend and finalise its financials within the stipulated time due to conflicts among the company's directors and sponsors over board control. The disputes led to court proceedings.  

The conflicts were eventually resolved through discussions and alternative dispute resolution, the insider added.  

In November, the company announced in a stock exchange filing that the internal disputes among its sponsor-family directors had been resolved, with all parties reaching an agreement.  

Following this, the company restructured its board, including a shareholder with more than 5% ownership as a director. The regulator-appointed independent directors were subsequently withdrawn.  

Its newly appointed board consists of Md Bakhtiar Rahman as chairman (acting), Md Mizanur Rahman as managing director and CEO (acting), and directors Md Harunoor Rashid, Md Abdullah Bokhari, Md Talha, Md Saidul Islam, Khodeza Khatoon and Md Joynul Abedin Chowdhury.

Amid internal conflicts in June 2023, the Bangladesh Securities and Exchange Commission (BSEC) had restructured Al-Haj Textile's board, appointing independent directors. However, the disputes among the directors continued for over a year.  

The owners have now resolved the issues among themselves. In February, in a letter to the BSEC signed by Md Bakhtiar Rahman and Md Mizanur Rahman, both shareholder-directors, Al-Haj Textile stated that the disputes had been resolved.  

On 17 November, the BSEC withdrew its appointed independent directors from the company's board.  

In its letter, the BSEC noted that the sponsor-directors of Al-Haj Textile Mills collectively hold 30% of the company's shares. It also noted that the company's shares are trading in the B category, leading to the withdrawal of the commission's earlier directive appointing independent directors.