FE Today Logo

Emerald Oil looks to hold pending meeting as it keeps rising on DSE

FE REPORT | May 30, 2023 00:00:00

Emerald Oil Industries on Monday declared that it will hold a board meeting on June 1 after it remaining pending for three years to discuss audited financial statements of 2020, 2021 and 2022.

The stock rose 3.29 per cent to Tk 119.1 that day on the Dhaka Stock Exchange despite the fact that the company has seen losses piling up for years.

Even before the announcement of the meeting schedule, the stock escalated almost 300 per cent in just three months.

Emerald Oil has failed to hold annual general meetings (AGM) too since 2017.

It said on Monday that it had obtained permission of the High Court to hold pending AGMs for the period of 2017-2022.

The company stopped producing rice bran oil in 2017, battered by a shortage of working capital, after its founder had embezzled loan money and fled the country.

As per the latest financial disclosure, the company had incurred a loss of Tk 68 million in 2019 while the figure was Tk 117 million the year before.

The stock has been soaring at a time when investors have turned away from many fundamentally-sound companies.

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.

Whenever the market starts rising, a vested group spreads rumours to manipulate low-performing stocks, he added.

Emerald is one of the companies whose boards have been restructured following a decision by the Bangladesh Securities and Exchange Commission in 2021.

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.

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 get control of the board, Minori Bangladesh, which had injected fresh funds to resume production, decided to issue new shares against its investment.

Some other companies with worrisome business records have also made it to the top gainers' list frequently in recent times.

For example, Meghna Pet Industries and Meghna Condensed Milk, two concerns of Meghna Group of Industries, jumped high on the DSE despite losses piling up for years with no sign of recovery in the foreseeable future.

Meghna Pet Industries soared 44 per cent in eight trading sessions to Tk 42.10 on Monday while Meghna Condensed Milk rose 24 per cent to Tk 35.6 during the same time.

[email protected]

Share if you like