BSEC launches probe into RN Spinning-Samin Food merger process
The Bangladesh Securities and Exchange Commission (BSEC) has launched a verification process into the amalgamation of RN Spinning Mills, a listed company, with non-listed firm Samin Food and Beverage Industries and Textile Mills Limited.
In a move aimed at ensuring transparency and protecting investors' interests, the regulator formed an inquiry committee to investigate the entire merger process and examine supporting documents submitted by the companies.
The commission has sought a comprehensive set of documents from both RN Spinning and Samin Food, covering financial, legal, and corporate records from 2019 to 2024.
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These include board meeting and annual general meeting (AGM) minutes, the Independent Scrutinizer's Report on the merger, and the High Court order approving the amalgamation.
Additionally, the BSEC asked for the court order that approved the merger, as well as any relevant correspondence from the DSE or the commission during the merger period, share valuation reports, lists of board members, and quarterly shareholding data between 2019 and 2024.
The regulator also sought clarification on any material uncertainty regarding the company's ability to continue as a going concern, as highlighted in audit reports over the past six years.
It asked for an explanation of the adverse opinions issued by auditors between 2020 and 2024.
Additionally, the regulator requested details related to insurance claims, including the total receivable amount, current collection status, outstanding dues, and the steps taken to recover the insurance compensation.
Furthermore, BSEC has asked for a list of sister concerns and a No Objection Certificate (NOC) from creditors in relation to the merger.
An official of the company told TBS, "We will provide all the information as requested by the regulator."
RN Spinning, whose operations halted in 2019 after a fire incident, has incurred consistent losses since the 2018–19 fiscal year. As part of a recovery plan, the company proposed merging with Samin Mills and relocating its facility to Gazipur to resume production.
The High Court approved the merger in 2024, following BSEC's consent in October 2023. Under the scheme, RN Spinning shareholders received new shares at a 1:5.59 ratio, while Samin Food shareholders were issued shares at a 1:1 ratio.
RN Spinning's share price closed at Tk16.30 today at the Dhaka Stock Exchange.
