Unable to make bank transactions, SK Trims shuts down factory

SK Trims & Industries has announced closure of its factory, saying it is unable to continue operations with its bank accounts frozen since July this year.
All nine bank accounts meant to facilitate exports, imports, daily transactions, and dividend distributions by SK Trims have been frozen over allegations of corruption and money laundering by controversial revenue official Md Matiur Rahman. It was suspected that Mr Rahman and his family had invested ill-gotten money in the company.
"The management of the company has been trying hard to continue production since June this year, even after the freezing of the bank accounts," said company secretary Riaz Haider in a statement issued on Sunday.
He also said the fully export-reliant company needed bank transactions to do business.
SK Trims in the statement in fact revealed that Mr Rahman's son and daughter have indirect ownerships in the company. His children are shareholders of Global Max Packaging Industries Limited and Global Shoes Limited and the companies have 11.31 per cent and 2.72 per cent stakes in SK Trims.

How many shares Mr Rahman's son and daughter have in the Global Packaging and the Global Shoes could not be known.
Following the announcement of the factory shutdown, SK Trims' stock plunged 9.78 per cent to Tk 16.6 per share on Sunday on the Dhaka Stock Exchange, becoming the fourth top loser for the day.
The Bangladesh Bank issued an order to freeze bank accounts of SK Trims on recommendation of the Anti-Corruption Commission (ACC) as part of an investigation into illegal means of wealth accumulation by Mr Rahman.
SK Trims was listed in the stock market in 2018 by raising Tk 300 million.
Mr Rahman and his family made headlines after his son Mushfiqur Rahman Ifat in June posted a photo of a sacrificial goat on social media and claimed to have bought it for Tk 1.5 million.
Discussions ensued about expensive watches, cars, and properties that Mr Rahman and his family members owned, including resorts, shooting spots, and bungalows. Mr Rahman faced public wrath as his lifestyle became the embodiment of corruption for he earned a basic monthly salary of Tk 78,000.
Meanwhile, a three-member committee has been formed by the ACC to probe into allegations of Mr Rahman's alleged corruption and money laundering.
The ACC team has already sought wealth statements from Matiur, his first wife Laila Kaniz Lucky, her children Ahmed Taufiqur Rahman Arnab, Farzana Rahman Ipshita, and second wife Shammi Akhtar Shibli.
As allegations of corruption surfaced, the finance ministry transferred Mr Rahman to the Internal Resources Division (IRD) from the National Board of Revenue (NBR) on June 23 this year.
He then went on voluntary retirement, effective from August 29, according to an IRD circular.
Shareholding status in SK Trims
Matiur has never had any stake in the company in his name, according to the pre-IPO prospectus and the latest financial statement of SK Trims.
However, his second wife Shammi Akhter Shibly, daughter, two brothers, and a sister had held a 55.42 per cent stake together in SK Trims before it became public in 2018.
According to the financial statements for FY23, Matiur's wife, sister and daughter no longer had any holdings in the company.
That means they either offloaded their shares or transferred shares to accounts registered in different names.
Global Max Packaging Industries and Global Shoes, where Matiur's family members reportedly had major stakes, had 19.28 per cent and 7.12 per cent shares in SK Trims before the initial public offering (IPO).
Although no one among Mr Rahman, his wife, son and daughter are board members of SK Trims, his son and daughter are shareholders of Global Max Packaging Industries and Global Shoes. The companies have nominated directors on the board of SK Trims.
Moreover, Matiur's brother MA Kayum Howlader, managing director of SK Trims, owns 14.99 per cent stake in the company.
General shareholders have 68.98 per cent shares in the company. The suspension of the company's operation raises questions about the recovery of their money.
The company's total assets stood at Tk 1.7 billion as of March this year, including current assets of Tk 866 million while total liabilities were Tk 293 million.
Meanwhile, the Bangladesh Securities and Exchange Commission formed a five-member body last week to investigate irregularities in the stock market, including the involvement of Fortune Shoes, Ring Shines and ACME Pesticides in illegally raising money through placement shares.
Mr Rahman possessed placement shares of at least 15 companies, including Fortune Shoes, Ring Shines and ACME Pesticides.
Financial Performance
SK Trims manufactured all kinds of sewing thread, elastic, poly, carton, photo card, back board, bar code, hangtag, tissue paper, gum tape etc. for export-oriented garments industry.
Before going public, SK Trims reported a profit of Tk 16 million for FY15, Tk 41 million for FY16, and Tk 53 million for FY17.
After the listing, the company secured a 108 per cent year-on-year increase in profit to Tk 194 million in FY19.
The earnings gradually declined over the next three fiscal years and stood at Tk 76 million in FY22. The company has reported a profit of Tk 106 million for the nine months through March this year, up from Tk 74 million in the same period last year.
"We do not know whether the company's financial performance is real or fabricated, but innocent investors will be ultimately losers as the company suspended production," said Md Sajedul Islam, managing director of Shyamol Equity Management.
The regulator should take tough actions against such malpractices so that general shareholders are not defrauded again, he added.
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