BSEC instructs new owner of Toyo Knitex to resume operation within 3 months
As per the approval, 5,449,058 shares held by the late Md Mozammel Haque through his legal heirs and others will be transferred to DEX-I according to the share purchase agreement
The Bangladesh Securities and Exchange Commission (BSEC) has directed the new owner of Mithun Knitting and Dyeing Limited, now known as Toyo Knitex (CEPZ) Limited, to resume operations within three months and address any pending issues following the transfer of ownership.
Destination Express International (DEX-I) Limited, a China-based courier service provider, recently received BSEC's approval to take over Mithun Knitting. This approval was granted by the commission to protect investor interests and resume business operations.
As per the approval, 5,449,058 shares held by the late Md Mozammel Haque through his legal heirs and others will be transferred to DEX-I according to the share purchase agreement.
The legal heirs include Ms Rabeya Khatun, Md Rafiqul Haque, Md Mahbub-Ul-Haque, Md Atikul Haque, Md Rabiul Haque, Ms Syeda Hasina Haque, Mahbuba Haque, Mahmuda Haque, Mahfuza Haque, and Monsura Haque.
The commission has also set conditions regarding the approval of the company.
The sponsors and directors must collectively hold a minimum of 30% of the paid-up capital of the company at all times. The company will also constitute a Board of Directors incorporating new shareholders who hold 2% or more shares in the company.
Additionally, the shares held by directors and shareholders shall be locked in for a further three years in a block module. These shares cannot be used as collateral or mortgage for any loans from financial institutions as per securities laws.
The settlement of the share transfer must be done through a banking channel. The buyers and sellers are required to submit a compliance report to the commission within seven days of the transfer's execution. The proceeds will execute the transfer within 30 days from the issuance of this letter.
Earlier, the share price of the non-operational Mithun Knitting soared by 73% in 15 trading days, rising from Tk18.90 on 2 May to Tk32.70 before the approval of the ownership change. Yesterday, the share closed at Tk27.30 on the Dhaka Stock Exchange.
DEX-I Limited is well-known for its courier service within China, particularly for the garment industry. It has a strategic partnership with a world-renowned logistics conglomerate.
Mithun Knitting's factory in the Chittagong Export Processing Zone (CEPZ) has been non-operational since September 2019. Its lease was terminated by the zone authorities in February 2019 due to unpaid dues of nearly Tk20 million to several institutions, including the Bepza, after it failed to comply with the safety reforms required by the Accord.
The safety compliance failure resulted in a blacklisting by foreign buyers, who stopped placing orders at the factory.
To recover some of the outstanding debts, including workers' wages, the Bepza auctioned off the factory's assets.
As of 31 May 2024, sponsor directors retain a 17.20% stake in Mithun Knitting, institutional investors hold 15.49%, foreign investors hold 0.16%, and general shareholders hold 67.15% of the shares.