Imam Button to enter the shoe market

Imam Button Industries Ltd, a publicly listed company that produces buttons for the apparel sector, has decided to set up a shoe-making unit in its factory premises in Chattogram.

According to a Dhaka Stock Exchange (DSE) disclosure, the company will set up a leather unit to make shoes for the local market.

The project's total cost will be Tk11.55 crore. The company will invest Tk4.25 crore as the initial investment of the project. The rest of the amount of Tk7.3 crore will be invested step by step.

The area of the leather unit will be around 19,500 square feet and the office area will be 1,000 square feet. The production capacity will be 1.6 lakh pairs per annum and the expected profit will be Tk2 crore per year, according to the disclosure.

Imam Button Managing Director ASM Hasib Hasan told The Business Standard that the company will also put its focus on the local shoe market.

"We have a plan to export shoes in the future if we get a positive response from the local market," he added.

Regarding the company's declaration of an interim dividend in the first quarter, he said, "We took lease a running agro project at Barguna with a land area of 8 bighas a few months ago."

The running project generated revenue in the first quarter of the current fiscal year that drove the company to declare the dividend from that revenue, he added.

Last week, the Bangladesh Securities and Exchange Commission (BSEC) instructed the DSE to investigate the abnormal increase in the share price of the company.

The commission highlighted that its surveillance department observed a remarkable 85% surge in Imam Button's share price, reaching Tk194.10 apiece between 7 September and 26 October of this year.

Deeming this price movement as abnormal, the BSEC called for scrutiny of the trading activities of the company to find out if any manipulation had taken place.

The share price of the company increased by 2.98% to Tk203.80 on the DSE on Tuesday.

The BSEC mandated that the Dhaka bourse submit the investigative report within 15 working days from the date of the order.

The Imam Button managing director said earlier, "I am also surprised to see the abnormal price hike of the company's shares. So, I highly appreciate the regulator's move."

According to the DSE, the price of Imam Button shares was Tk82.8 each on 21 May this year. Subsequently, the share price experienced a significant jump of over 158%, reaching Tk213.8 each by 22 November.

In the first quarter, the company's board declared a 1% interim cash dividend for its general shareholders, marking the first dividend declaration since the fiscal year 2009-10.

Additionally, the company reported a net profit for the July-September quarter, a notable development for a company that had been incurring losses since 2011.

Imam Button is a subsidiary of Imam Group, whose owners are currently fugitives in connection with a loan scam.

In February of this year, the BSEC restructured the company's board, appointing Professor Mohammad Sogir Hossain Khandoker, Md Mahamud Hosain, and Mohammed Masum Iqbal as independent directors. The regulator also directed the newly-appointed independent directors to nominate two shareholder directors from investors holding a minimum of 2% of the company's shares.