Auditor concerned about Khulna Printing’s business ability

A special auditor that recently reviewed the financial statements of Khulna Printing and Packaging Limited – a concern of Lockpur Group – has expressed serious concerns about the company's ability to operate or sustain business.  

The special auditor reviewed the company's financial statements to find out the reasons why the firm shut down and did not declare dividends for its shareholders. It was supposed to investigate the alleged involvement of the company's board of directors and top management in money laundering.

The regular auditor of Khulna Printing earlier revealed that the company incurred a net loss of Tk22.63 crore for the year ended on 30 June 2022 and that it had been posting net losses for several years.

The company also showed negative shareholder's equity, negative retained earnings, negative net asset value per share, negative net profit after tax, and negative earnings per share during the year.

This situation raised serious concerns about the company's ability to continue or sustain its business.

Earlier, the securities commission had observed that the turnover of Khulna Printing sharply fell in fiscal 2020-21, but its costs increased suspiciously. But, the company's financial statement did not represent the truth, the stock market regulator observed.

The company also showed that its raw materials worth Tk18.47 crore were damaged and it, additionally, invested Tk3.35 crore in another concern of Lockpur Group. However, the investment did not generate any income during this period.

In October last year, the company decided to shut down its factory, following the freezing of the bank accounts of the company's chairman and managing director as per a court order.

As of 31 October 2022, sponsors and directors jointly held 39.76%, institutions 1.11% and public investors 59.13% shares in the company.

The court passed the order in a money laundering case filed by the Anti-Corruption Commission.

Earlier in 2015, Khulna Printing lost the bond facility as the National Board of Revenue locked its business identification number over allegations of tax evasion. But it had been continuing operations by sourcing raw materials locally.

But, in 2017, the company was compelled to shut the factory due to raw material shortages.

The NBR reopened the BIN in 2018 and the company reopened the factory in the same year. 

The last trading price of the company on the Dhaka Stock Exchange was Tk8.90 per share on Monday.