No disclosure in 18 months

Investors holding shares of C&A Textile and Tung Hai Knitting may find themselves in a difficult situation as the firms have not made any corporate disclosure in the last 18 months and their factories were found shut.

The two companies have not published their annual financial statements in the last fiscal year, in a breach of listing regulations. Their last disclosure was a third quarterly report covering the January to March period of 2016-17.

Since August 2017, both companies have not shared any information with investors through Dhaka Stock Exchange (DSE).

Moreover, the DSE yesterday said it had visited the factory premises and head offices of C&A Textiles and Tung Hai Knitting but found them closed.

“As a result, the team could not enter the factory premises and head offices of the companies to carry out the inspection,” it said.

C&A Textile has also been downgraded to junk stock within only three years of its listing in 2015 as its commercial operation was suspended and it did not give any dividend. Similarly, Tung Hai Knitting, listed in 2014, has become a junk stock for not giving dividend.

On June 7, 2017, C&A Textile informed investors through the DSE website that it needed to upgrade some of its equipment and bring some structural changes to the factory as per recommendations of the Accord and the Alliance, two western buyers' platforms working to improve workplace safety in Bangladesh's readymade garment sector.  

The company's commercial operations were suspended temporarily on May 1 in the same year. Production will resume soon after the remediation is carried out, it said.

Almost two years have passed but the commercial operation has not begun yet and the company has not informed the investors about the development.

Market analysts say investors make investment on the basis of a company's financial statements. So, if the financial statements are not published, investors cannot understand the real situation of a firm.C&A Textile and Tung Hai Knitting did not reply to emails sent to them on February 26. Senior officials of the companies also did not receive phone calls.

Saifur Rahman, spokesperson of the Bangladesh Securities and Exchange Commission, said the commission would take action against the companies.

“Already, we have fined all of the directors, except the independent directors, of Emerald Oil for the same reason.”

As of November 2017, sponsors of Tung Hai Knitting held 30.04 percent of shares whereas general investors held 64.34 percent. Meanwhile, C&A Textile's sponsors held 22.14 percent of shares and general investors 62.19 percent.

Through their listings, C&A Textile raised Tk 45 crore from the market and Tung Hai Knitting Tk 35 crore.

C&A Textile's stocks fell 2.56 percent to Tk 3.80 on the DSE yesterday while Tung Hai Knitting's were down 2.22 percent to Tk 4.40.
Source: https://www.thedailystar.net

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