Explain share surge, non-compliance: DSE to Khulna Printing
The paper and printing firm’s shares jumped 192% jump in a month
Despite its factory operations being halted for years, a lack of financial disclosures, and no clear business revival plan, Khulna Printing & Packaging Ltd's shares have skyrocketed over the past month, leaving investors baffled.
In just one month, the shares of the loss-making, non-compliant, Z-category firm surged by 192%, rising from Tk7.20 each on 23 December last year to Tk21 each on Wednesday.
The Dhaka Stock Exchange (DSE), the country's premier bourse, sent multiple letters to the paper and printing sector firm regarding the unusual price surge and increased trading volume.
In an early January letter, the DSE urged the firm to explain its non-compliance, particularly its failure to hold an annual general meeting (AGM) since the 2021-22 fiscal year.
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The DSE mandated the firm to provide an explanation by 12 January, warning that failure to comply would result in necessary actions under the directive issued by the Bangladesh Securities and Exchange Commission (BSEC) in May 2024.
The DSE's letter to the Khulna Printing and Packaging managing director states, "As per records, the last AGM of your company was held on 29 December 2022. Your company did not hold an AGM for the year 2024, which constitutes non-compliance with listing regulations, transaction settlement regulations, and the BSEC directive."
A DSE official told TBS that the company responded to DSE's letter of explanation and requested a 30-day time extension to submit its compliance explanation.
The DSE issued another letter to the company requesting an explanation for the unusual rise in its stock price. In response, the company informed the bourse on 20 January that there is no undisclosed price-sensitive information behind the recent spike in share price and trading volume, as per a disclosure from the DSE.
Unusual share price jump
According to DSE data, Khulna Printing and Packaging's share price was below face value at Tk7.20 on 23 December last year.
Since then, its share price began to rise, closing at Tk21.10 each on Tuesday at the DSE.
On Wednesday, the share price closed at Tk21 each, down 0.47% from the previous trading session.
The surge in share price is not a one-time event; in February last year, its share price significantly jumped to Tk56.80 each, marking the highest level in two years.
After that, it again began to decline and made the lowest in two years to Tk7.20 each in December last year.
Factory closure
On 26 October 2021, Khulna Printing and Packaging, a concern of Lockpur Group, shuttered down its factory, following the freezing of the bank accounts of the company's Chairman and Managing Director SM Amzad Hossain as per a court order.
At that time, the company said the factory would remain shuttered for an uncertain period.
On 21 October that year, the court ordered the freezing of the bank accounts of Amzad Hossain and all his companies in a money laundering case filed by the Anti-Corruption Commission (ACC).
Later, in February 2023, in a spot inspection, a DSE team found that Khulna Printing and Packaging's factory closed.
Despite the closure, the bourse did not take any actions against the paper and printing firm.
As per available data at the DSE, in 2021-22, Khulna Paper and Printing incurred a loss of Tk22.63 crore. It failed to pay any dividends to its shareholders since the 2020-21 fiscal.
