The auditor has raised concerns over Baraka Power's ability to continue operations after all of its power-supply contracts with the government expired more than a year ago.
Since the expiry of the contracts, the company has generated no revenue
from its own operations and has been surviving solely on income from its sister concerns.
The auditor flagged the issue in Baraka Power's recently published financial statements for FY25, warning that the current situation is unsustainable and poses risks to investors.
According to a disclosure, the company's 51-megawatt power plant has remained shut since October last year following the expiry of its contract with the Bangladesh Power Development Board (BPDB). There has been no confirmation of a contract renewal.
"This uncertainty casts significant doubt on the company's ability to continue as a going concern on a stand-alone basis," the auditor said.
The Dhaka Stock Exchange (DSE) disclosed the information to shareholders and investors on Monday.
Following the disclosure, Baraka Power's share price fell 2.82 per cent to Tk 6.90 per share on the DSE.
At present, the company has no earnings from its own operations and relies on income from its power generation and garments manufacturing subsidiaries. However, the power generation subsidiary has a limited remaining operational life, while the garments subsidiary faces uncertain demand, increasing risks for shareholders.
In its FY25 financial statements, the company disclosed plans to diversify its business while awaiting a new power-supply contract from the government.
Baraka Power's chairman said the company is exploring opportunities in renewable energy to align with growing demand in the sector.
"We are looking for good business opportunities to become involved with solar and bioenergy projects in order to align ourselves with the anticipated expanding need for renewable energy. Our business development team is working relentlessly in search of feasible and viable renewable energy-based power-producing projects," he said.
However, industry observers note that the government has revised its policy on purchasing power from the private sector, making contract renewals increasingly unlikely for companies such as Baraka Power.
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