BSEC to investigate business activities of two Meghna Group companies

The stock market regulator on Tuesday formed a four-member committee to review the business activities of two listed companies from the Meghna Group of Industries-KA to safeguard investors’ interests.

In May last year, the Bangladesh Securities and Exchange Commission (BSEC) had earlier sent letters to Meghna Condensed Milk Industries and Meghna PET Industries asking them to explain the reasons for their continued losses. But the companies did not respond properly to the commission.

The commission’s decision followed an inspection by the Dhaka Stock Exchange (DSE) which found the factories were closed. The first exchange submitted its report to the BSEC.

BSEC Co-Director Md Saiful Islam, Deputy Director Shahrier Perves, Deputy Director Minhaz Bin Salim and Dhaka Stock Exchange (DSE) Senior Executive Md Rasel Rahman are the members of the inquiry committee .

The commission formed the committee based on the stock exchange’s report, sources said.

Both companies released their financial statements and held regular annual general meetings, but did not notify investors of the plant’s closure.

Even the companies’ auditor, Islam Quazi Shafique and Co, did not mention anything about the state of production in the factories.

In his qualified opinion on the companies’ financial statements, however, the auditor expressed doubts about the future of the companies by stating that their liabilities exceeded their assets.

Meghna Condensed Milk started operations in 1999 with the announcement of the establishment of the largest condensed milk factory in the country.

The company was established with a loan from Sonali Bank under the ICD Agro Based project. It was floated on the stock exchange in 2001.

According to information from DES, the company has suffered losses over the past five years and its investors have not received any dividends during this period.

On the other hand, Meghna PET, which started its activities in 1997, mainly produces PET bottles.

The company, which was also floated on the capital market in 2001, has been losing money for five years.

Investors also did not receive any dividends from this company.

Sponsors and executives of both companies jointly own a 50% stake in each company.

The last stock price of Meghna Condensed Milk was 21.10 Tk and Meghna PET Industries was 24.70 Tk at DSE on Tuesday.