Matiur-linked SK Trims laid off after bank accounts frozen 

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SK Trims and Industries, owned by the family members of former National Board of Revenue official Matiur Rahman, has laid off its factory workers amid a raw materials and financial crisis following the freezing of its bank accounts.

In a letter to the capital market regulator on Saturday, the garment accessories manufacturer stated that its factory closed on 7 September. Production will resume once the bank accounts are unfrozen, and workers, staff, and all regulatory bodies will be notified, it added.

The setback for the publicly listed company with an annual turnover of around Tk88 crore and its shareholders came after the company's bank accounts were frozen by the court and the Bangladesh Financial Intelligence Unit (BFIU) in mid-July.

These actions followed recommendations from the Anti-Corruption Commission (ACC), which is currently investigating Matiur's assets on charges of acquiring illegal wealth.

In another notice regarding the layoffs, SK Trims having around 1,000 workers explained that due to the freezing of its bank accounts, salaries and overtime for May, June, and July have been paid through personal financing. Since June, raw materials could not be imported, resulting in a lack of work at the factory.

"There is also no financing available to keep the factory operational. As a result, management has been compelled to halt all operations until the bank accounts are reactivated," the notice reads.

According to the Dhaka Stock Exchange (DSE), the majority stake of SK Trims, an export-oriented firm, is held by public shareholders.  

A total of 6,963 shareholders, including institutional and general shareholders, hold 68.98% of the company's shares, while the remaining 31.02% is owned by the family. The DSE data also shows that the company's share price has been declining since 9 July. On that day, the share price was Tk27 each; by Sunday, it had fallen to Tk16.6 each.

In a letter to the stock market regulatory body, signed by company secretary Md Riaz Haider, it was stated, "The board of directors has decided to stop production. Currently, there is no other way for us to continue production."

"Our management has been trying hard to continue production since June 2024, even after the bank accounts were frozen. When the bank accounts are unfrozen, production will resume, and the company will notify its workers, staff, and all regulatory bodies," the letter added.

The letter also mentioned that on 25 June, the BFIU froze the bank accounts maintained with One Bank. Following a request considering export, government revenue, employment creation, and public interest, the Bangladesh Bank reopened the bank account without conditions on 10 July 2024. However, on 11 July, the Metropolitan Sessions Judge Court and the BFIU froze nine bank accounts of the company.

"It is notable that the ACC seems to target SK Trims due to its connection with Matiur Rahman, a former NBR official. In reality, neither Matiur Rahman nor his wife, son, or daughter are board members or shareholders of SK Trims & Industries Limited. However, his son and daughter are shareholders in Global Max Packaging Industries Limited and Global Shoes Limited," the letter clarified.

According to shareholder details for July, Global Max Packaging Industries holds 11.31% of SK Trims shares, while Global Shoes holds 2.72%.

SK Trims was listed on the stock exchange in 2018, raising Tk30 crore to expand its business, with shares issued at Tk10 each. The company's principal activities include manufacturing various accessories for the export-oriented garment industry.

According to SK Trims' quarterly financials, its revenue for the first nine months of the fiscal 2023-24 grew by 40% to Tk92 crore, and its net profit jumped by 86% to Tk8.81 crore. This performance surpassed its annual revenue and profit for the fiscal 2022-23, which were Tk88.75 crore and Tk7.97 crore, respectively.

The company paid a 3% cash dividend to its shareholders in FY23, and its shares are currently trading in the B category.