Sinha Fashions exits LafargeHolcim Bangladesh board
Sinha Fashions Limited, a concern of the once prominent and leading apparel business conglomerate Sinha-Medlar Group, has dropped out of LafargeHolcim Bangladesh Limited's board through the resignation of its nominated director Naheed Akhter Sinha.
A senior officer at the multinational cement manufacturer told The Business Standard that she resigned from the board last week, citing personal reasons. But LafargeHolcim declined making any formal comments to this end.
According to the Dhaka Stock Exchange (DSE), the resignation took effect on 28 March this year.
This correspondent reached out to Sinha Fashions Limited's directors Anisur Rahman Sinha, Mizanur Rahman Sinha, and Arifur Rahman Sinha for comments. However, they did not respond to the phone calls or the text messages.
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According to the LafargeHolcim annual report, Anisur Rahman Sinha was on the board of the cement company from 2003 to 2018 as a nominated director of Sinha Fashions. Then, Naheed Akhter Sinha was serving in this post. Now, after 21 years, her resignation leaves no member of the Sinha family on the board of LafargeHolcim.
In this regard, the LafargeHolcim official said that no one from Sinha Fashions has been proposed for the post of director so far.
Meanwhile, there is a rumour in the stock market that Sinha Fashions is looking for a suitable buyer to sell its shares in LafargeHolcim Bangladesh. However, the LafargeHolcim official said they have not yet received an application to this end.
Sinha Fashions holds 2.49% or 2.89 crore shares at LafargeHolcim.
Earlier, Sinha Fashions transferred 54 lakh shares of LafargeHolcim and sold an additional 7.50 lakh of its shares to repay a bank loan and maintain a clean sheet with the Credit Information Bureau.
According to LafargeHolcim sources, in October last year, Sinha Fashions transferred 54 lakh LafargeHolcim shares to Midland Bank to repay a loan from the bank.
Sources in the Bangladesh Securities and Exchange (BSEC) said Sinha Fashions defaulted on the loan, and hence the lien on the shares of LafargeHolcim is forfeited. The company had to be removed from the board of Lafarge as a defaulter.
To regularise this loan, Sinha Fashions applied for permission for an immediate share transfer without declaring it to the stock exchange. The commission approved this, and the DSE also transferred the shares according to the commission's decision.
According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Sinha-Medlar Group, once Asia's largest garment trader, is not doing well. Due to lost work orders and financial losses, it closed the factory at Kanchpur in Narayanganj in October 2021. It was their biggest factory. However, Sinha Fashions' factory in Ashulia is currently in production.
Apart from Sinha, LafargeHolcim's local partner is Islam Group's Islam Cement. Currently, Manzurul Islam is a nominated director of LafargeHolcim. On the other hand, Surma Holding BV of the Netherlands has seven nominated directors. It currently has a Bangladeshi shareholder director on Lafarge's board.
LafargeHolcim's financial performance
While other cement manufacturers' profits erode due to business cost hikes, LafargeHolcim Bangladesh reported a record profit in 2022, which was also the highest in its history.
Not only this, the multinational cement company has given the highest dividend in its history in 2022. Last year, it paid a total of 48% in cash dividends. Of these, 33% have already been paid as interim. And 15% was declared as the final dividend.
According to the company's press release, its year-on-year revenue grew over 15% to Tk2,359 crore and the net profit also surged by 15% to Tk445 crore in 2022. The revenue and profit figures were the highest in its history until 2022.
Iqbal Chowdhury, the new chief executive officer of LafargeHolcim, said in a press release that "2022 was a commendable year for the company, as we delivered record performance both in profitability and cash generation."
"We launched new sustainable products, like Supercrete Plus, which ensured growth in the aggregates business, increased our digital footprint, and gained traction in our new business channels," he added.
He also said 2023 will be another challenging year as geopolitical uncertainty and inflationary pressure will continue. "Despite that, we are optimistic about continuing to deliver strong performance, as we demonstrated in the previous years."
Despite a good business year, its share price did not keep up with its performance. Its share has traded on the floor at Tk64.80 each since February at the DSE.
