11 listed firms remain traceless | The Daily Star
12:00 AM, July 11, 2018 / LAST MODIFIED: 12:00 AM, July 11, 2018

THE UNTRACEABLE COMPANIES

11 listed firms remain traceless

Eleven companies listed on the Dhaka Stock Exchange have made off with at least Tk 42.19 crore of investors' money, in what can be described as a stunning instance of swindling.

Neither the capital market regulator nor the DSE has taken any step to trace the companies and retrieve the money.

The companies are Amam Sea Food, Bangladesh Electricity Meter (BEMCO), Chic Tex, German Bangla J V Food, M Hossain Garments, Metalex Corporation, Pharmaco International, Rangamati Food Products, Raspit Data Management, Raspit Inc Bd and Saleh Carpet.

Listed on the over-the-counter market of the DSE for years, the companies are now untraceable.

The OTC market is a separate trading floor for the companies that are delisted from the main board or do not meet the eligibility for listing on the main board.

As per the face value of the stocks gathered from the DSE, general investors lost Tk 42.19 crore. But DSE documents indicate none purchased the shares at face value: all paid at least five times more, so the total losses would be about Tk 200 crore.

The Daily Star went to the addresses of six of the 11 companies -- Raspit Data Management, Raspit Inc Bd, Saleh Carpet, Chic Tex, Pharmaco International and M Hossain Garments -- and did not find their existence at all.

“Many investors come here looking for this company, but they have left many years ago,” said Fakhrul Islam, the watchman of the property listed as the official address of Raspit Data Management and Raspit Inc Bd.

The two companies had sold off their all assets before vacating the premise, he said. The owner of the building that housed Saleh Carpet's office said the company had departed in 2008 without clearing the rent.

And the company sold off its 13 acres of land in Chittagong's Bhatiary on August 28, 2008 to East West Container Terminal. “Why is the regulator yet to take any steps against the companies?” said Mostaque Ahmed Sadeque, president of the DSE Brokers' Association.

The sponsors of the companies are running other businesses, so it is easy to trace them, he added. But the stock market regulator, the Bangladesh Securities and Exchange Commission, washed its hands of the issue.

“This is not our responsibility,” said Saifur Rahman, spokesperson of the BSEC, adding that the commission does not have the manpower to investigate an issue of this stature.

It is the responsibility of stock exchanges, he said.

Asked if the issue managers, the ones responsible for bringing the companies to the stock market, can be held responsible for the brazen act of fraudulence, Rahman replied in the negative.

“The issue managers have responsibility on some issues and for a certain period of time. We cannot ask them after such a long time,” he added.

KAM Majedur Rahman, managing director of the DSE, said the stock exchange will take initiative to trace the companies.

The companies can be delisted from the OTC board but it is not the solution, as investors will not get their money back, he added.

Jakir Hossain, an investor of M Hossain Garments, said he looked for the company's factory but failed.

Now, he has given up hopes of retrieving his money.

Amam Sea Food was listed in 1966 as a food and allied company. The company's total number of shares stands at 100,800 and the face value of each share is Tk 100.

General investors, who held 34.7 percent shares of the company, lost Tk 34.97 lakh as per the face value of the shares.

BEMCO was listed on the DSE as an engineering company in 1995. Its total shares are 364,000, each carrying a face value of Tk 100.

General investors, who held 74.73 percent stakes of the company, lost Tk 2.72 crore.

German Bangla J V Food was listed in 2001 as a food and allied company. Its total stock was 50 lakh and general investors, who had 50 percent stakes, lost Tk 2.50 crore.

M Hossain Garments was listed in 1995 as a textile company. General investors lost Tk 4 crore, as they held 66.67 percent of the 6 lakh shares with face value of Tk 100.

Listed in 1988, Metalex Corporation, an engineering company, had 50,000 shares of Tk 100 face value. Investors held 47.11 percent of the shares and lost at least Tk 23.55 lakh.

Pharmaco International was listed in 1987. The total number of shares is 2 lakh, each with a face value of Tk 100. General investors lost Tk 1.48 crore as their shareholding was 74.44 percent.

Rangamati Food was listed in 2001 as a food and allied company. Its total share was 30 lakh. General investors lost Tk 2 crore as their shareholding was 66.67 percent.

Raspit Data Management, an IT firm, was listed in 2001. Its total shares are 50 lakh. General investors lost Tk 2.50 crore as their shareholding is 50 percent.

Raspit Inc was listed on the DSE in 1995 as a food and allied company. General investors, who held 50 percent of the 1.57 crore shares of the company, lost Tk 7.88 crore.

Saleh Carpet was listed in 1995. Investors lost Tk 3.97 crore as they held 65 percent of the company's total shares of 61.10 lakh.

Chic Tex was listed as a textile company in 1996. The paid-up capital of the company was Tk 12.54 crore.

Almost the entire shares of the company were in the hands of general investors, who lost Tk 12.54 crore on the basis of the face value of the shares.

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