Sharp Industries comes under probe

The stock market watchdog has decided to investigate the business operations of Sharp Industries PLC (formerly RN Spinning Mills Limited) over the past six years, suspecting irregularities in their merger process.

A three-member probe committee has been formed with specific terms of reference. It will have to submit a report on its findings to the securities regulator within 60 days.

According to sources at the Bangladesh Securities and Exchange Commission (BSEC), an official order regarding the investigation has been issued recently. Sharp Industries' managing director has been informed of the investigation.

The committee will investigate whether insiders have derived any undue benefits from mergers or other significant transactions within the specified period.

The pre-merger share investors of RN Spinning Mills are still enduring losses.

For example, 200 shares of R.N. Spinning Mills had been converted into 35 shares [at the ratio of 1: 5.59] of the new entity that came into being after the amalgamation of listed R.N. Spinning and non-listed Samin Food & Beverage Ind. and Textile Mills.

Currently, shares of Sharp Industries PLC (formerly RN Spinning Mills Limited) are traded at Tk 20.9 each.

As the pre-merger price of RN Spinning was Tk 6.2 each share, investors have already lost more than 40 percent of their investment.

The regulatory order states that in the interest of the capital market and general investors, it is necessary to examine the actual financial and operational state of Sharp Industries over the last six years.

The committee will also see if there were any objections or adverse opinions from auditors regarding the compan0y between 2020 and 2024.

farhan.fardaus@gmail.com