Emerald Oil relegated to junk status

The Dhaka Stock Exchange (DSE) downgraded Emerald Oil Industries to 'Z' category from 'A' category, effective from today (Tuesday), as its production has remained suspended since January this year.

According to a recent directive of the Bangladesh Securities and Exchange Commission, any listed firm should be shifted to the junk category if production remains suspended for six months in a row.

The struggling Emerald Oil's production has been suspended for 11 months for what the company said was a shortage of gas supply to its factory.

The company should have been labeled as junk stock at least five months ago in compliance with the regulatory directive.

Stock brokers and merchant bankers have also advised against providing loans to investors to purchase shares of Emerald Oil.

Following Monday's news, the stock plunged 4.35 per cent to Tk 33 per share. However, the stock soared 80 per cent in the month to Sunday.

Why is Emerald Oil in

trouble

Emerald Oil began production of its Spondon-branded rice-bran oil in 2011 and entered the stock market in 2014 by raising Tk 200 million.

The company had to suspend operations just three years after listing for a working capital shortage. A loan scam by founder Syed Hasibul Gani Galib and his subsequent fleeing from the country caused a suspension of the company's production from 2017 to 2021.

The Bangladesh Securities and Exchange Commission (BSEC) in 2021 restructured its board.

In 2021, Japanese company Minori's Bangladesh arm received the stock market regulator's nod to bring the company back into production by investing nearly Tk 315 million.

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