Silco Pharma's financials under BSEC scanner

Infographic: TBS

The Bangladesh Securities and Exchange Commission (BSEC) has formed a three-member committee to investigate allegations of financial irregularities at Silco Pharmaceuticals, a publicly listed company engaged in the manufacturing, selling, and distribution of pharmaceutical products.

The committee comprises BSEC Deputy Director Md Mustafizur Rahman, Assistant Director Md Tarikul Islam, and Assistant Director Mohammad Ruman Hossain. They have been directed to submit their findings to the commission within 60 days. 

BSEC Executive Director Mohammad Rezaul Karim confirmed the formation of the committee yesterday. 

According to BSEC officials, the probe follows findings by the Dhaka Stock Exchange (DSE) that raised concerns about anomalies in the company's financial statements. 

The investigation team will examine the utilisation of Tk30 crore raised through Silco's initial public offering (IPO) in 2019, which was intended for business expansion. It will also examine the paid-up capital of the company, the officials said.

Additionally, the team will assess the physical existence of assets such as plants, machinery, equipment, and buildings, and also review financial metrics including reported profit, sales, cost of goods sold, cash received from customers, account receivables, inventories, purchase of raw materials and other allied Issues.

The officials further stated that the investigation will scrutinise the financial statements of Silco Pharmaceuticals from fiscal years 2020 to 2023 to determine whether they present a fair view of the company's assets, liabilities, equity, profits, and cash flows. The role of the company's auditors during this period will also come under review.  

Tingku Ranjan Sarker, Silco's company secretary, stated over the phone that he has not received any official letter regarding the matter and is unaware of the formation of this committee.   

Before being listed on the stock exchanges, Silco Pharmaceuticals presented itself as a financially healthy drug manufacturer. However, after its listing, the company's profit and revenue have gradually declined. 

In FY17, the company reported a profit of Tk10.29 crore with a revenue of Tk91 crore, but by FY24, its profit dropped to Tk4.57 crore. 

In the July-September quarter of 2024, Silco's revenue stood at Tk11.47 crore, marginally up from Tk10.22 crore in the same period the previous year, while net profit rose to Tk1.72 crore from Tk1.10 crore.

In the July to September quarter, its earnings per share stood at Tk0.17 which was Tk0.11 a year ago. Its net asset value per share stood at Tk22.84 at the end of September 2024.

In January this year, Silco's share price was Tk23.4, but it gradually declined. Yesterday, the closing share price stood at Tk16.30 on the DSE.

In FY24, the company recommended 1% cash dividend for shareholders, excluding directors. At the end of the fiscal, its earnings per share stood at Tk0.44. 

As of 30 November 2024, the company's ownership structure comprised 38.99% shares held by sponsors and directors, 16.98% by institutions, and 44.03% by the general public.