Murshedy family loses two directorships in Envoy Textiles

Infographic: TBS

Amidst a struggle for supremacy between two business partners, the Abdus Salam Murshedy family has lost two directorship positions on the board of Envoy Textiles.

During the annual general meeting (AGM) on Thursday, the majority of votes were cast against shareholder-directors Sharmin Salam, Murshedy's wife, and Ishmam Salam, his son.

At the same time, shareholders elected Sk Bashir Ahmed, the representative of Enovytech Aviation, and Moin Uddin from Sheltech Ceramics to the board, filling the vacant positions.

In the same voting, Kutubuddin Ahmed's wife Rashida Ahmed was re-elected director to the board.

According to company officials, the AGM, however, could not confirm the appointment of the managing director and deputy managing director because of a High Court stay.

Therefore, Tanvir Ahmed and Barrister Shehrin Salam will continue to serve Envoy Textiles as its managing director and deputy managing director, respectively.

The AGM was pending due to a legal battle among owners.

The textile miller had earlier postponed its AGM, which was scheduled for 26 June, after Murshedy moved the Appellate Division to challenge a High Court order.

The shareholders at the AGM approved a 15% cash dividend for fiscal 2021-22.

According to its financials, its revenue stood at Tk1,240 crore, a 43% increase compared to the previous fiscal year. The net profit was Tk50 crore.

The legal battle started after Kutubuddin Ahmed's separation from Envoy Textiles' parent, Envoy Group.

Envoy Textiles, the world's first LEED-certified platinum denim mill, was listed on the stock exchanges in 2012.

In 2022, Envoy Group's founder Kutubuddin left it after handing over its ownership to his business partner Murshedy.

They, however, agreed on running the group's flagship company – Envoy Textiles – independently.

Then Kutubuddin and his family increased their holdings in Envoy Textiles.

According to data from the DSE, in a single day in March 2022, Kutubuddin, his son Tanvir, and daughter Sumayyah Ahmed bought 2.61%, 7.12%, and 2.61% shares, respectively, from other institutional investors.

In June last year, Murshedy filed a case challenging some amendments in the company's articles of association, a meeting notice, and the appointment of three additional board members and an independent director.

Later in September, the High Court reconstituted the board and appointed a retired justice as its chairman for an interim period until the shareholders of the leading denim manufacturer were able to resolve their disputes.

Envoy Group, which started its journey in 1984 with a business in the garment sector, now has 40 companies.

In all, these companies have an annual turnover of more than $400 million.

In the first nine months of fiscal 2022-23, Envoy Textiles witnessed a decline in its revenue and profit during the January–March quarter.

In the first nine months, its revenue stood at Tk807.79 crore and its profit at Tk29.43 crore.

As of 31 July 2023, sponsors and directors held 57.93%, institutions 35.03%, foreigners 0.07%, and general investors 6.97% of the company's shares.

The company's shares closed at Tk43.90 each at the DSE on Thursday.