The Bangladesh Securities and Exchange Commission also ordered the Institute of Chartered Accountants to take action against Aman Feed’s auditor
The securities regulator has fined four directors of Aman Feed Ltd, a company listed on the capital market, Tk25 lakh each for providing false information on using initial public offering (IPO) funds.
The Bangladesh Securities and Exchange Commission (BSEC) took the decision at its 716th meeting today.
BSEC has also ordered the Institute of Chartered Accountants to take action against the Aman Feed's auditor ACNABIN Chartered Accountants.
The firm breached rules by not mentioning the violation of this securities law in its audit report.
Consequently, Md Rokonuzzaman, a partner of the accounting firm, will never be allowed to audit the spending of any IPO fund.
According to sources, Aman Feed had collected Tk72 crore from the share market through IPOs. In its prospectus, the company had announced that it would use the fund for expansion, loan repayments and as working capital.
But in a special audit report, MBS and J Partners Chartered Accountants said the company had not used the money properly, and provided false information to the securities regulator.
This violates the conditions mentioned in Section 18 of the Securities and Exchange Ordinance 1969.
There are allegations that other listed companies of the Aman Group have misused IPO funds as well.
In August 2018, Aman Cotton Fibrous Ltd collected Tk80 crore from the share market to buy new machinery and repay its loans. Till now the company has repaid only a part of its loans and has not yet set up any new machinery. Around Tk72 crore of the IPO fund is still unused.
There is also an allegation that the company provided the money as security for another company of the group to take loans.
Despite that, the company in its utilisation report said all the loans were repaid.
AB Bank in October last year issued a legal notice on Aman Feed because the company has failed to pay the monthly instalments of a loan.
On Tuesday at the Dhaka Stock Exchange, each share of Aman Feed was sold for Tk28.70.
Poultry feed producer Aman Feed was listed in the share market in 2015. It gave a 12.5 percent cash dividend to its shareholders in the 2018-19 financial year. Its net profit was Tk47.87 crore, and its gross profit was Tk117.77 crore in that period.
At the same time, the company's earnings per share was Tk3.75 and net asset value was Tk32.54.