The stock market watchdog has launched an investigation into poor-performing Alltex Industries to evaluate whether the company has the strength to sustain its business.
A three-member inquiry committee has been asked to submit a report on its findings by the end of December.
Alltex Industries, manufacturer and exporter of bed sheet, quilt cover, pillow cases, duvet, table cloth, curtain, cushion covers, and shower curtain, has persistently reported losses for the seven years to FY24, except for FY22.
A letter issued by the Bangladesh Securities and Exchange Commission (BSEC) says the inquiry is necessary in the greater interest of the capital market and general investors.
The main objective of the probe will be to find out if the company has the ability to pay its debts and escape bankruptcy.
Talking to the FE over the phone, Managing Director of Alltex Industries Fahim Uddin Ahmad Arif, however, claimed that the investigation was part of the regulatory body's routine work.
"We have already supplied all documents to the inquiry committee," he said.
Meanwhile, investors, who invested in Alltex Industries, must have endured a big loss. The stock witnessed as much as 37 per cent price erosion since June last year to close at Tk 11 per share on the Dhaka Stock Exchange on Thursday last week.
The letter, which was issued on October 24 and signed by Md. Mahmoodul Hoque, director of inspection, enquiry, and investigation of the BSEC, says the team of investigators will examine the company's plant and equipment, inventories, cost of goods sold, sales revenue, payments against construction materials etc.
Established in 1986 and listed on the premier bourse 10 years later, Alltex industries in its FY17 financial statement said expensive raw materials, the strong position of the local currency against the dollar, and insufficient gas supply were the reasons for the loss.
Six years later in the FY23 statement, the company blamed its poor performance on the Russia-Ukraine war, continuous economic downturn, high inflation in the European market, and a shortage of gas supply.
The probe committee will also have to look into the revaluation of land, deferred tax, long-term and short-term loans, repayment capacity of Alltex, and related-party transactions.
The members of the committee are Mohammad Zahirul Haque, joint director (general); Mahmudur Rahman, assistant director (General), and Md. Mahmudul Hasan, assistant director (general), of the BSEC.
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