Shares for free: ACME Pesticides faces ACC action

Several top officials of ACME Pesticides, along with individuals and firms, received company shares without payment during its initial public offering (IPO), depriving the firm of capital and misleading general investors, the stock market regulator said yesterday.

Despite not paying for the shares, they received all the benefits as a general shareholder, ultimately depriving others, the regulator disclosed in a meeting at its office in the capital.

Following the discovery of the irregularity, the Bangladesh Securities and Exchange Commission (BSEC) has referred the case to the Anti-Corruption Commission (ACC) for legal action against those involved.

Among the accused are ACME Pesticides Chairman Shanta Sinha, Managing Director Reza-ur-Rahman Sinha, Director Ahsan Habib Sinha, and KM Heluar, Company Secretary Sabuj Kumar Ghose and Chief Financial Officer Selim Reza. They received shares without any payment, according to the BSEC.

The commission said some other individuals and firms also took shares of the company through private placement without payment prior to the company's 2021 IPO, which raised Tk 30 crore ($2.7 million) by issuing 3 crore shares.

The entities named include Md Afzal Hossain, SK Trims, Md Matiur Rahman, Bikrampur Potato Flakes Industries, Tafazzal Hossain Forhad, Javeed A Matin, Bengal Assets Holdings, Chittagong Pesticides & Fisheries, Heritage Capital Management, NRB Equity Management, Anjoman Ara Begum, Sheikh Mohammad Sarwar, Touhida Akter, Ruhul Azad, and Ranu Islam.

Shahjalal Equity Management, the IPO's issue manager, was found to have submitted false data in the prospectus. Its license has been revoked.

The regulator also decided to take action against Shiraz Khan Basak & Co, auditors of the company, as they failed to represent the real picture of the company in its financial statements.

Shafiq Khan Basak & Co, another auditor of the company, failed to represent the IPO fund utilisation data properly in its financial reports. The regulator will ask the Financial Reporting Council to take action against the firm.

The Daily Star tried to talk with Sabuj Kumar Ghose regarding the irregularities; however, his phone was found to be switched off.

Separately, the BSEC fined nine directors of Genex Infosys Tk 1.03 crore each for violating securities rules by trading shares of Sonali Paper & Board Mills. Genex Infrastructure was fined Tk 2.55 crore for the same reasons.

The nine Genex Infosys directors are: TIM Nurul Kabir, Prince Mojumder, Shah Jalal Uddin, Chowdhury Fazle Imam, Hassan Shahid Sarwar, Mohammed Adnan Imam, Nilofar Imam, Rokeya Islam and Zahrul Syed Bakht.

The BSEC also decided to summon six chartered accountancy firms for hearings on why they will not be banned for five years for their failure in auditing listed firms properly.

The firms are: A Hoque & Co, Ahmad & Akhtar, Mahfel Huq & Co, Ata Khan & Co, Shiraz Khan Basak, and Islam Quazi Shafique.