Emerald Oil flies high with losses piling up for 6 years

Emerald Oil Industries, a junk stock, has been flying high on the Dhaka Stock Exchange in the last one month despite it incurring losses and being unable to declare dividend for six years.
The company paid 10 per cent stock dividend in 2016.
It stopped producing rice bran oil in 2017, battered by a shortage of working capital, after its founders had embezzled loan money and fled the country.
Emerald's financial indicators are in the negative. Losses have been piling up. As per the latest financial disclosure, the company had a loss of Tk 68 million in 2019 while the figure was Tk 117 million the year before.
The irony is that the stock is soaring when investors have turned away from many fundamentally-sound companies.
Emerald has escalated 106 per cent in a month to close at Tk 65.90 on Wednesday on the prime bourse.
Such an unusual price movement prompted the bourse to serve a show-cause notice to the company authority.
The company made a copycat response, saying there was no undisclosed price-sensitive information for the recent price hike.
Market experts say that manipulation is the reason behind the abnormal price surge.
The price rise is unusual considering the current status of the company, said Prof Abu Ahmed, former chairman of the economics department of the University of Dhaka.
A group of dishonest people might have been behind the artificial price hike.
"General investors keep chasing many low-profile stocks as they fly on the bourses to make capital gains overnight, but when people start investing in them, manipulators dumped their holdings," Prof Ahmed added.
Emerald is one of the companies whose boards have been restructured following a decision by the Bangladesh Securities and Exchange Commission in 2021.
The representative of Japanese company Minori's Bangladesh arm joined the board with an investment of Tk 315 million.
The BSEC recently allowed Emerald to issue 31.5 million new shares at the face value in favour of Minori Bangladesh against its investment -- on some conditions.
BSEC Executive Director and spokesperson Md Rezaul Karim said the commission had instructed Emerald to conduct all pending AGMs as per the company act and to submit all audited financial statements up to June 2022.
The company failed to hold an AGM since 2017.
The old sponsor of the company, Syed Hasibul Gani Galib holds 21.41 per cent shares, of which about 18 per cent are mortgaged to banks, according to sources.
The new owner is struggling to take control of the board for the sponsors do not meet the requirement of holding minimum 30 per cent shares. So, to take control of the board, Minori Bangladesh, which had injected fresh funds to resume production, decided to issue new shares against its investment.

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