BSEC to seek ACC action against ACME Pesticides' 16 shareholders for acquiring 2.33cr shares without payment

The Bangladesh Securities and Exchange Commission (BSEC) is set to forward an inquiry report to the Anti-Corruption Commission, recommending stern action against the directors, officials, and placement shareholders of ACME Pesticides Limited who allegedly acquired shares worth Tk23.39 crore without making any payment.

The list of beneficiaries includes prominent individuals and entities such as former National Board of Revenue (NBR) member Matiur Rahman, corporate houses, and institutional investors, BSEC said in a press release today (17 September).

According to the probe findings, a total of 2.33 crore placement shares were allocated without cash settlement. Among the recipients, Matiur Rahman alone received 37 lakh shares, while Bikrampur Potato obtained 28 lakh shares. 

Chittagong Pesticides received 60.30 lakh shares, Bengal Assets 11.34 lakh shares, and Heritage Capital Management 41.79 lakh shares. Other notable beneficiaries include Afzal Hossain and SK Trims, who were each allocated 10 lakh shares, as well as NRB Equity Management, Anjoman Ara Begum, Tafazzal Hossain Forhad, and several others.

The regulator has identified a network involving ACME Pesticides' top management, who allegedly facilitated these questionable allocations. Chairman Shanta Sinha, Managing Director Reza-ur-Rahman Sinha, Directors Ahsan Habib Sinha and KM Heluar, Company Secretary Sabuj Kumar Ghose, and Chief Financial Officer Selim Reza have all been named in the inquiry report for their roles in enabling the transactions.

As part of its enforcement actions, the BSEC has decided to cancel the license of Shahjalal Equity Management, the issue manager of ACME Pesticides' IPO, for failing to ensure compliance and due diligence. It has also announced plans to take action against Shiraz Khan Basak and Co, the pre-IPO auditor, for not presenting the true financial picture in its audit report. Furthermore, the regulator will approach the Financial Reporting Council (FRC) to take measures against Shafiq Basak and Co, which failed to properly audit the utilisation of IPO funds.

The BSEC believes that the scandal surrounding unpaid placement shares undermines investor confidence and represents a significant breach of governance and transparency in the capital market. By forwarding the matter to the ACC, the regulator expects to ensure that those responsible, including influential individuals and corporate beneficiaries, are held accountable.

Market analysts say the case underscores broader concerns about weak oversight in IPO processes and the misuse of placement shares. They argue that ensuring transparency in fund utilisation and share allocation is vital to restoring confidence in the capital market, particularly at a time when retail investor participation is already subdued.

If the ACC takes up the matter, ACME Pesticides may face further scrutiny, with possible legal and financial consequences for its management, shareholders, and associated firms. The case could set a precedent for how irregularities in the capital market are addressed in future.

ACME Pesticides, listed on the Dhaka Stock Exchange in 2021, raised Tk30 crore through its initial public offering by issuing three crore shares at Tk10 each. The company had pledged to use the proceeds to expand its production capacity. 

However, as of April 2025, nearly 32% of the raised funds—amounting to Tk9.51 crore, including accrued interest—remained unutilised, according to a utilisation report prepared by Ashraf Uddin & Company, Chartered Accountants. The company has recently sought approval to extend the deadline for IPO fund utilisation until December this year.

Financially, ACME Pesticides has been struggling since its listing. In the fiscal year 2024, the company reported a loss of Tk10.27 crore, yet paid out a token 0.25% cash dividend to shareholders. This followed a declining trend in profitability over previous years, with a net profit of Tk12.99 crore in FY23, Tk18.88 crore in FY22, and Tk22.20 crore in FY21. For the July–March period of FY25, the company reported a loss per share of Tk1.02.

On the trading floor, the company's performance has mirrored its weak financials. Shares of ACME Pesticides dropped by 1.12% today, closing at Tk17.50 at the Dhaka Stock Exchange.

As per the latest shareholding report for August, sponsors and directors hold 31.80% of the company's shares, institutional investors account for 19.45%, and the general public holds the remaining 48.75%.