Special auditor appointed to review Alif’s rights share

The stock market regulator has appointed a special auditor to review the financial statements and utilisation of the rights share fund of Alif Manufacturing Company.

The Bangladesh Securities and Exchange Commission (BSEC) recently appointed Howladar Yunus & Co, a chartered accountancy firm, as the special auditor.

The auditor will also collect evidence of the unutilised balance of the proceeds.

It will review the financial statements for the period that ended on 30 June 2019 and 2020 as well as the report on property, plant and equipment, inventories, trade receivables, turnover, and the use of operating cash flows and cash investment for the financial years 2019 and 2020.

The auditor will report on the role of the board of directors and the audit committee in preparing and presenting financial statements in compliance with the International Financial Reporting Standards.   

On 30 January 2018, the company received Tk109.40 crore by issuing rights share. It wanted to use the fund within 15 months but did not. Till December 2019, the company utilised Tk76 crore.

In December last year, the securities regulator requested the authorities concerned to bar the company's managing director from leaving the country till further notice due to pending legal actions against him over financial irregularities.

Sources said the company had not used the fund of rights share properly.

The company collected a large amount of money from the stock market by repeatedly issuing initial public offerings, rights shares, and bonus shares. After that, it sold a big number of shares in the secondary market at high prices, added sources.

Market insiders alleged that the company had deceived investors in the capital market. It raised capital by issuing rights shares to raise hope among investors. But investors suffered big losses by holding the company's shares.

Alif Manufacturing's business has been worsening since the change in its management. The company has not yet completed its annual disclosure for the financial year ending on 30 June 2020.

In the July-March quarter of the last fiscal year, the company posted a net profit of Tk10.14 crore. During this period, its earnings per share decreased by 38% to Tk0.39 compared to that in the same period of the previous fiscal year.

The company was incorporated on 25 May 1995. It changed its name to CMC-Kamal Textile Mills to Alif Manufacturing Company on 28 September 2017.

It was listed on the stock exchanges in 1997.

The price of its shares at the Dhaka Stock Exchange was Tk6.80 each on Tuesday.

Alif Manufacturing manufactures and markets high-quality cotton yarn for making clothes to be used by local weavers, textile mills, and the readymade garment industry.