Directors of 5 cos face the music

The securities regulator has slapped a fine of Tk 8.0 million on managing directors (MDs) and directors of five companies for breaching securities rules by furnishing window-dressed balance sheets, officials said.
Out of Tk 8.0 million, 4.0 million was imposed on the MD and eight directors of Alltex Industries which showed net profit instead of a net loss for the year ended on June 30, 2014.
Other four companies of OTC (over-the-counter) market will have to pay an aggregate amount of penalty worth Tk 4.0 million for breaching securities rules. The companies are: Sonali Aansh, Ashraf Textile, Tamijuddin Textile Mills and Chic Tex.
The fines were imposed Monday at a meeting of the Bangladesh Securities and Exchange Commission (BSEC) at its office in the city.
BSEC Executive Director Mohammad Saifur Rahman said in its audited financial statement Alltex Industries showed a net profit of Tk 122.7 million although the company incurred a net loss of Tk 52.2 million for the year ended on June 30, 2014.
The securities regulator said the company did not specify physical existence of fixed assets worth Tk 1.19 billion in its financial statement.
The company also did not show provisioning against the internal expenses worth Tk 174.89 million. As a result, the company's net profit stood at Tk 122.7 million which was supposed to be a net loss of Tk 52.2 million.
The company did not submit details of its investment worth Tk 70 million made into the subsidiary company Alltex Fabrics following the regulatory instruction.
"That's why the regulator fined the company's MD and other seven directors Tk 0.5 million each for breaching the section 11 (2) of Securities and Exchange Ordinance, 1969," BSEC executive director Saifur Rahman said.
The securities regulator fined the MD and three directors of Chic Tex Tk 0.1 million as the company did not submit the financial statement of 2011 to the commission as per Company Act.
The MD, chairman and eight directors of Ashraf Textile will have to pay a penalty worth Tk 0.1 million each for not furnishing the company's third quarterly (Q3) report of 2014 as per existing rules.
The securities regulator fined MD, chairman and five directors of Sonali Aansh Tk 1.4 million each for not including some information in the audited financial statement for the year ended on June 30, 2012.
The BSEC has also fined six directors of Tamijuddin Textile Mills Tk 1.2 million as the company showed inflated earning per share (EPS) in its third quarterly (Q3) of 2014.
mufazzal.fe@gmail.com