Cotton

BSEC fines Aman Cotton’s directors, auditor

The Bangladesh Securities and Exchange Commission (BSEC) has fined the directors of Aman Cotton Fibrous Ltd, and its auditor, ATA Khan & Co Chartered Accountants, for anomalies in the company’s initial public offering (IPO) fund utilisation plan, and financial statements.

The decision came at a commission meeting on Thursday. 

The securities regulator fined directors of Aman Cotton, excluding independent and nominated directors, Tk3 crore each, and directed the cancellation of the company’s lien of Tk73 crore in fixed assets within seven days.

BSEC also decided to fine the auditor Tk10 lakh for providing false information regarding its financial statements.

The regulator said the company failed to use its IPO proceeds within the scheduled period and also gave loans to sister concerns without the approval of general investors.

Without a clearly stated objective of investing in any joint venture, subsidiary, or associate, Aman Cotton has been violating rules by making such investments.

The company also did not cooperate with its special auditor, Howladar Yunus & Co, having hidden information about its financial status, said BSEC. 

Moreover, the company transacted a large sum of money with related parties without any proper documentation.

In June 2020, the commission appointed the special auditor to investigate Aman Cotton’s IPO proceeds and audited financial statements.

The company raised Tk80 crore from the stock market with an IPO in August 2018 and declared it would buy new machinery and repay loans with the funds within a year of raising the money.

But to date, the company has only repaid its loans and is yet to buy machinery, leaving around Tk72 crore of its IPO funds unused.

Aman Cotton Fibrous Ltd manufactures 100% cotton-carded, combed, and semi-combed, ring-spun grey yarn for knitting and weaving.

The company went into commercial production on 1 November, 2007, and was listed on the bourses in 2018.

The last trading price of each share of the company at the Dhaka Stock Exchange was Tk18.6 on Thursday.

 




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