DSE inspection finds RSRM Steel factory closed, but share price surges

The Dhaka Stock Exchange (DSE), in an inspection, has found that the Ratanpur Steel Re-Rolling Mills (RSRM) Limited factory is currently non-operational. 

A DSE team, which visited the company's manufacturing facility in Chattogram yesterday(19 July), reported that operations were completely shut down.

Despite the disclosure, RSRM shares surged by 7.62% yesterday (19 July), closing at Tk11.30 on the DSE. The company continues to trade under the Z category, having failed to publish any financial statements since the 2020-21 fiscal year.

RSRM's parent entity, Ratanpur Group, was once one of Chattogram's largest industrial conglomerates, founded in 1984 and employing around 800 people in production until 2019. At its peak, the group's annual turnover stood at approximately Tk700 crore.

However, in December 2020, two of its steel plants ceased operations due to unpaid electricity bills and a lack of working capital. The company had earlier assured the DSE that it would resume production from 4 October 2021, but operations never restarted.

The Ratanpur Group is currently burdened with approximately Tk2,500 crore in defaulted loans from ten banks, resulting in 30 cases filed against it. Key individuals named in these lawsuits include Managing Director Maksudur Rahman, Chairman Shamsun Nahar Rahman, Yunus Bhaiya (the MD's brother), sons Mizanur Rahman and Marzanur Rahman, and Md Alauddin, chairman of Modern Steel Mills Limited.

These challenges have led to shareholders being deprived of returns for years, with the company failing to declare any dividends. In an attempt to revive factory operations, MD Maksudur Rahman, along with his son Mizanur Rahman and wife Shamsun Nahar Rahman, sold their entire holdings in South Bangla Agriculture and Commerce Bank (SBAC) in January 2023.

In October 2023, the Bangladesh Securities and Exchange Commission (BSEC) appointed four independent directors to RSRM. However, a BSEC official said these newly appointed directors have been unable to assume their roles due to internal complications within the company.

RSRM initially raised Tk100 crore from the capital market in 2014 by issuing 2.5 crore shares at Tk40 each, which included a Tk30 premium. According to the April 2024 shareholding report, the company's sponsors and directors hold 29.93% of shares, falling short of the regulatory requirement of 30%. Institutional investors hold 34.08%, with the remaining 35.99% held by the general public.