Nearly two years after the new management took over Intech, it made earnings disclosure for FY22 to the despair of shareholders.
The IT firm said it made a loss of Tk 36 million in the year for having to comply with provisioning requirement against assets, which had been shown in the financial statements prepared by the previous management but were found non-existent by the new board.
The "fictitious assets" were adjusted with retained earnings, according to a stock exchange filing on Monday.
FY21 had also been a year of bleeding for the business entity, taking the cumulative loss for the two consecutive years to Tk 122 million.
The board decided not to pay any dividend for FY22.
In the disclosure, the company said the auditor deployed by the securities regulator in January last year could not trace some of the assets.
The Bangladesh Securities and Exchange Commission (BSEC) asked G Kibria & Company, an accounting firm, to conduct a special audit after the new board had raised issues of irregularities and discrepancies tied to assets and financial transactions.
An earlier audit report submitted to the BSEC for FY20 said the previous management had set aside Tk 71.86 million as capital for new business initiatives. It also said the company had made advances to "Solquest Limited" of Tk 27.50 million and the rest were supposed to be paid for software undergoing testing.
The special audit could not find any proof of any new initiative and could not trace back Tk 27.50 million.
Company secretary Md Mozahidul Islam said that when the new management took charge of the company, it was already under a deluge of debts, including listing fees and rents.
A group of people from S Alam Group and KDS Group, and entrepreneurs from the IT sector joined the Intech board by buying shares from the secondary market. In November 2021, the board was reconstructed under the new management.
The company's founder chairman ATM Mahbubul Alam, and directors -- Shadika Mahbub and Anisuzzaman - resigned from their posts.
After the ownership transfer, the new board made an allegation that the former chairman, ATM Mahbubul Alam siphoned off funds of the company for family purposes.
The IT Company, which got listed in the stock market in 2002, mainly provides internet connectivity services to corporate entities and individual clients. It is also involved in software business.
It engaged in fish farming in 2014 after IT business failed to be a success.
With a fish farming project on 40 acres of land in Tarakanda of Mymensingh, it also branched out to resort business but that did not take off.
In June 2020, the securities regulator fined the company for violating securities rules by investing in fisheries and resorts.
Due to the irregularities, the company also suffered a fund crisis keeping it from developing ISP business and software business.
The previous management did not focus on the IT business but the new board has been striving to exploit business opportunities offered to the IT sector, said the company secretary.
To cope with the liquidity crisis, the company leased out 30 acres of land in Mymensingh in February this year.
According to the lease agreement with Biswas Agro Fisheries, the deal will bring an annual income of Tk 2.10 million until February 2028.
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