BSEC launches probe into Asiatic Laboratories' financials, IPO fund usage
The Bangladesh Securities and Exchange Commission (BSEC) has initiated an inquiry into the financial statements and the use of funds from the initial public offering (IPO) of Asiatic Laboratories.
A committee, led by BSEC Additional Director Md Al Masum Mirdha, was formed in this regard in the last week of October and is expected to submit its report within 60 days.
Other members of the inquiry committee include Assistant Director Md Mosavvir Al Ashick and Dhaka Stock Exchange (DSE) Manager Snehasish Chakraborty.
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The committee will review Asiatic Laboratories' financial records from 2017 to 2022 and investigate how the IPO proceeds were utilised, BSEC's Executive Director and spokesperson Mohammad Rezaul Karim told The Business Standard.
The BSEC said they will take appropriate actions if any irregularities are found.
Talking to TBS, Ishtiaq Ahmed, company secretary of Asiatic Laboratories, confirmed that he has received a letter regarding the investigation but declined to comment further.
Today, Asiatic Laboratories' share price closed at Tk34.50 on the Dhaka Stock Exchange. For the fiscal year 2023-24, the company recommended a 10% cash dividend for general shareholders, excluding sponsors and directors.
Its earnings per share (EPS) reached Tk2.82, up from Tk2.19 in the previous fiscal year, with a net profit of Tk34.51 crore, compared to Tk27 crore in the prior year. The net asset value (NAV) per share was Tk39.31 as of June 2024.
Asiatic Laboratories is involved in the manufacturing, selling, and distribution of pharmaceutical products (for human use) across Bangladesh, including tablets, capsules, oral liquids, powders for suspension, ophthalmics, injectables, and other pharmaceutical items.
Background of IPO scrutiny and fines
In November 2022, the BSEC gave final approval for Asiatic Laboratories' IPO subscription after it had been delayed for nearly a year. The subscription process was initially suspended in January 2022 after allegations emerged of false land ownership claims, inaccurate financials, and fraudulent share money deposit reports.
Following an investigation, a probe committee found evidence of falsified land ownership documents, inaccurate financial statements, and fraudulent share money deposit reports.
Consequently, the BSEC fined each director of Asiatic Laboratories and the issue manager Tk50 lakh. Additionally, Managing Director Monir Ahmed, the chief financial officer, and the company secretary – who signed the prospectus – were each fined Tk25 lakh.
This led to a total fine of Tk75 lakh for Monir Ahmed due to his involvement in both sections of the process. Shahjalal Equity Management, the issue manager, was also fined Tk50 lakh for inadequate due diligence.
In September 2022, the BSEC allowed Asiatic Laboratories to raise Tk95 crore through an IPO under the book-building method. As of September 2024, the company's shareholding structure consists of 40.71% held by sponsors and directors, 12.26% by institutions, and 47.03% by the public.
