The market regulator has imposed fines totalling nearly Tk 15 million on top bosses of Khan Brothers PP Woven Bag Industries and Genex Infosys for inflating data and failing to distribute dividends on time.
The Bangladesh Securities and Exchange Commission (BSEC) also warned the chairman and directors of Aftab Automobiles that they would face hefty fines if they did not clear outstanding dividends within 30 days of the issuance of an order on Thursday.
The decisions were made at a commission meeting chaired by BSEC Chairman Khondoker Rashed Maqsood two days earlier, according to a statement.
The chairman, directors and senior officials of Khan Brothers PP Woven Bag have been penalised for providing false information in the audited financial statements for FY23.
The regulator identified data mismatches in the company's FY23 financial statements, including inflated figures for sales, assets and inventory.
According to the findings, the company reported raw materials and finished goods worth Tk 597.46 million, while only Tk 407 million worth of inventories could be verified, leaving a shortfall of Tk 190.46 million.
The commission also found inconsistencies in revenue reporting by Khan Brothers, which runs its business entirely on subcontracts. The company disclosed revenue of Tk 100.94 million and claimed realisation of Tk 74.35 million through cash transactions, but investigators were unable to trace any receipts through banking channels.
Moreover, the company carried forward export bill receivables worth Tk 62.21 million from FY21 and FY22 without clarifying whether it had received any export revenue at all during those years.
Following the findings, the market regulator fined Chairman Mohammed Enamul Kabir Khan, Managing Director Tofayel Kabir Khan, and directors Md. Ruhul Kabir Khan, Hazrat Ali and Jarin Kabir Khan Tk 2.5 million each. The company's Chief Financial Officer Md. Azizul Zabber was fined Tk 1 million, while Company Secretary Tapan Kumar Sarker was fined Tk 0.5 million.
The regulator said the penalties would be treated as personal liabilities of the individuals concerned.
In a separate decision, the commission fined former board members and officials of Genex Infosys a total of Tk 0.8 million for failing to distribute dividends of 3 per cent declared for FY24 within the stipulated time frame.
The BSEC imposed fines of Tk 0.1 million each on Chairman Mohammed Adnan Imam, Acting Managing Director Shah Jalal Uddin, directors Chowdhury Fazle Imam, Prince Mojumder and Nilofar Imam, and Oracle Services, which has a representative on the board, along with the then Chief Financial Officer and Company Secretary.
Meanwhile, Aftab Automobiles has been ordered to distribute unpaid dividends amounting to Tk 11.68 million within 30 days.
The company had declared a 10 per cent cash dividend for FY24, but of the Tk 74.60 million payable in dividends, only Tk 62.91 million has been distributed to shareholders.
The commission said failure to meet the deadline would trigger personal fines of Tk 3 million each for Chairman Shafiul Islam and Managing Director Saiful Islam. Directors Khaleda Islam, Sajedul Islam and Farhana Islam would each face a penalty of Tk 2 million. The then CFO would face a fine of Tk 1 million and the Company Secretary Tk 0.5 million.
The regulator said the penalties would take effect after the expiry of the 30-day deadline and would also be treated as personal liabilities. Additional fines of Tk 10,000 per day would be imposed for delayed payment of penalties.
The regulator further clarified that the imposition of penalties would not exempt the company from its obligation to distribute the unpaid dividends to shareholders.
At the meeting, the commission also decided to appoint focal point officials to strengthen nationwide investment education and safe investment awareness programmes.
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