Shurwid Industries seeks regulatory help to be back in business

Poorly performing and non-operative Shurwid Industries Limited has recently sought help from the Bangladesh Securities and Exchange Commission (BSEC) to revive its business by resolving issues regarding lawsuits, and dividends. 

In 2014, the company raised Tk14 crore through an initial public offering (IPO). Its factory has remained closed since 26 March 2020.

Its current Chairman Engineer Mahmudul Hasan alleged that the IPO fund was embezzled by the company's former Chairman Anis Ahmed and Managing Director Zahedul Hoque.

He said that the current management of Shurwid invested in the company during its capital market listing. But they took it over in 2018 after the former management failed to run the company smoothly.

Before March 2020, the company operated smoothly and declared 10% stock and 10% cash dividends for 2018 and 2019 respectively, Hasan said.

But it failed to disburse the declared cash dividend because of the rivalry among the company's former directors, he added.

He told The Business Standard, "We want to comply with the 30% shareholding rule as required by the BSEC."

"We already secured the court's permission for holding an annual general meeting. But we also need permission to execute some other decisions."

Hasan further said that some investors filed an application in the High Court (HC) for converting Shurwid's cash dividend for the year 2019 to bonus shares. The HC admitted this application in August 2020 and the issue is still pending.

Also, the BSEC filed a suit against the company in the Dhaka Chief Metropolitan Magistrate (CMM) Court for failing to disburse the cash dividend, and froze the BO accounts of sponsors, directors, and top officials, he continued.

"We are in big trouble and thus, we need the regulator's help to resolve these issues." 

On the other hand, Shurwid's former Managing Director Zahedul Hoque refuted Hasan's allegations. 

He told The Business Standard, "the current management took over the company without having any doubts or questions during the handover. Therefore, after four years of taking over the company, these allegations are baseless." 

"We failed to continue the business because the gas generator got damaged. We bought a new generator afterwards but did not get the gas line permission from the government," he added. 

In September 2020, the BSEC appointed a special auditor for the company to investigate its financial statements.

In 2017, a change in Shurwid's management created hope among the investors.

In May 2018, the company decided to lower its paid-up capital to minimise its accumulated loss.

But after failing to do so, Shurwid tried to diversify its business to generate more income.

The principal activity of Shurwid Industries is to manufacture PVC products. It also started Information Technology Enabled Service (ITES) & Software businesses.

Sponsors and directors now hold only a 12.01% stake in the company, while institutional investors hold 15.34%, and general investors 72.65%. 

The last trading price of each share of the company was Tk19 on Thursday at the Dhaka Stock Exchange.