BSEC rejects DBL Group concern's SME board listing

The Bangladesh Securities and Exchange Commission (BSEC) has rejected the qualified investor offer (QIO) of Parkway Packaging and Printing PLC – a concern of the DBL Group – because of some major non-compliances by the firm.

The commission has already issued letters to the related party in this regard.

Parkway Packaging and Printing manufactured cartons for the readymade garments industry. It started commercial production in 2008 and produces 35,000 pieces of cartons per day.

Earlier, the company applied to the BSEC for raising Tk5 crore from the Small Capital Platform of the Dhaka Stock Exchange (DSE) through a QIO under the fixed price method.  The company wanted to use the fund for working capital and meeting QIO expenses.

Seeking anonymity, a top official at the company said they want to apply for QIO again after June this year.

According to BSEC officials, the company applied for the QIO by submitting financial statements for the July to December period of 2022, that too without any document verification system (DVS) number.

Without verifying the financial statements, the QIO application cannot be accepted, they added.

Also, the BSEC found that Parkway Packaging has taken a bank loan of Tk37.36 crore, while it has given a Tk32.09 crore loan to its sister concerns. It has a total of Tk7.27 crore in cash and at bank.

The commission also found that a significant revenue was generated from the sister concern companies.

According to BSEC, the company's gross profit margin increased to 18.48% from 14.23% year-on-year at the end of December 2022, indicating an overstatement of profits and understatement of cost of goods sold by Parkway Packaging.

Also, the commission found that the company's paid-up capital abnormally increased from Tk60 lakh to Tk45 crore in three years through issuing bonus shares by overstating profits.

Moreover, the company has allegedly overvalued its assets, equity, and understated depreciation, and administrative expenses.