The company did not know the real cause of why the stock exchanges have suspended trading in the main market of the bourses
The securities regulator will scrutinise the vetted documents and latest financial statements of Sonali Paper and Board Mills before its trading gets rolling on the mainboards of stock exchanges.
The Bangladesh Securities and Exchanges Commission (BSEC) has asked for the documents from the Dhaka and Chittagong stock exchanges within seven working days.
According to sources, the exchanges have already suspended the trading of the company following the BSEC directive. It, however, did not mention any cause or any violation by the company.
On the other hand, BSEC sources said after getting the documents and recommendations of the stock exchanges, the commission will take the decision on trading.
The company did not know the real cause of why the stock exchanges have suspended trading in the main market of the bourses.
Earlier on July 2, 2020, small capital-based Sonali Paper and Board Mills got relisted on the mainboard of stock exchanges.
Both exchanges in their board meetings had approved the relisting of the company on the mainboard from the over-the-counter (OTC) market.
In the first nine months of last fiscal year, the company's net profit was Tk3.46 crore, down from Tk5.23 crore, and earnings per share was Tk2.29, down from Tk3.46 in the same period of the previous year.
In the January-March quarter, its net profit was Tk0.53 crore and the earnings per share was Tk0.35.
The company's net asset value per share was Tk778.86 as of March 31, 2020.
In November last year, the BSEC exempted Sonali Paper from having to comply with several rules.
However, both the stock exchanges rejected the regulator's approval to allow Sonali's shares to be traded on the main market as the low-profile company did not have positive net current assets in the last three financial years.
On top of that, the company's paid-up capital was below Tk30 crore – a condition that has to be met to get listed on the bourses.
Despite the refusal, the securities regulator has again allowed the company to come back to the main market.
Sonali Paper mainly produces white and printing paper, liner paper, simplex paper, and duplex paper. Its main competitors are Bashundhara Paper Mills, Hakkani Pulp and Paper Mills, Karnaphuli Paper Mills and Magura Paper Mills.
Sonali Paper is trying to cater to the rising demand for locally manufactured paper. At present, the company's production capacity is 45,000 kg per day and 35,000 tonnes per year.
The company started its business in 1977 and got listed on the DSE in 1985. In 2006, Younus Group took over Sonali Paper after years of poor performance.
Sonali was ousted, along with other companies, in 2009 from the mainboard to the OTC market because of underperformance or nonperformance in business, failure to hold shareholders' annual general meeting for years, and converting own shares into electronic ones instead of paper certificates.
Since then, the new directors have been trying to bring the business back on track.
The company now has a reserve and surplus of Tk488.14 crore, and its paid-up capital is Tk15.13 crore.