BSEC forms committee to probe Rahima Food’s share allocations
The committee will also scrutinise the company’s records, focusing particularly on paid-up capital and share allocations
The Bangladesh Securities and Exchange Commission (BSEC) today (26 September) formed a three-member committee to investigate the paid-up capital and share allocations among general investors of Rahima Food Corporation.
According to sources within the commission, this move follows complaints from several general investors concerning irregularities related to their shares.
The committee will also scrutinise the company's records, focusing particularly on paid-up capital and share allocations. The company's allocated shares include unsettled shares, paper shares, and electronic shares.
On Thursday, the company's share price closed at Tk119.20 on the Dhaka Stock Exchange.
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The members of the investigation committee are Ziaur Rahman, deputy director of the BSEC; Md Rakibul Islam, manager of Dhaka Stock Exchange; and Kazi Minhaj Uddin, AGM of Central Depository Bangladesh Limited.
According to the investigation order, the committee will also verify the actual number of shares by comparing reports submitted to two key institutions – Central Depository Bangladesh Limited (CDBL), which manages the electronic record of shares, and the Registrar of Joint Stock Companies and Firms (RJSC), responsible for corporate registration and compliance.
The committee is tasked with examining whether there have been any discrepancies or irregularities in the issuance and allotment of shares, ensuring compliance with all relevant rules and regulations.
A senior official of the company, speaking on condition of anonymity, stated that Rahima Food received several complaints from general investors regarding paper shares that have not yet been dematerialised.
He noted that the dematerialisation process for shares began in 2012, and at that time, some investors may have dematerialised fake shares instead of real ones. After City Group took over the company, it received similar complaints, which have been challenging to resolve. He added that the company is working to address these issues as per the commission's order.
Rahima Food Corporation was incorporated as a private limited company in 1990 and was listed in the food and allied sector of the stock exchanges in 1997. Its paid-up capital is Tk20 crore.
The company has been out of production since 2013 due to a decline in demand for its products. City Group has had five directors, including its chairman, on Rahima Food's board since 2017. An independent director was also appointed during that time.
In July 2018, the Dhaka Stock Exchange delisted Rahima Food's shares due to its prolonged inactivity. However, in 2020, the company was relisted on the stock exchanges.
As of 31 August 2024, sponsors and directors jointly held 37.38%, institutions 11.75%, foreign investors 4.99%, and the general public 45.88% of the company's shares.
In the January to March quarter of 2024, Rahima Food generated revenue of Tk4.07 crore, compared to Tk7.94 crore in the same period of the previous year.
During this quarter, its net profit stood at Tk48 lakh, down from Tk1.27 crore a year ago. Its earnings per share were Tk0.34, and its net asset value per share was Tk10.14 as of the end of March 2024.
Rahima Food's main products include coconut oil, soybean oil, mustard oil, and cashew nuts.
