Regulator bars Al-Haj Textile from issuing stock dividends

The market regulator has rejected the stock dividend proposal by Al-Haj Textile Mills for FY24, as the company failed to comply with regulatory conditions.

The yarn manufacturer in December last year recommended 5 per cent cash and 35 per cent stock dividends for FY24 in an announcement delayed by more than a year.

The company said the stock dividend was recommended to utilize retained profits as paid-up capital to improve its capital adequacy. The recommended stock dividend was subject to approval from the Bangladesh Securities and Exchange Commission (BSEC).

However, the securities regulator refused to approve the stock dividend, citing inconsistencies in the audited financial statements.

The company, in a stock exchange filing on Monday, said it had been notified of the regulatory decision through a letter the day before.

BSEC spokesperson Abul Kalam said the company's audited financial statements were inconsistent and that Al-Haj Textile had also failed to publish its financial statements on time.

"That's why the commission rejected its stock dividend application."

The company published its financial results for FY24 a year after the deadline, and it has yet to reveal its financial performance for FY25, although four months have passed since the year-end.

According to listing regulations, listed firms are required to submit their annual audited financial statements within four months of the end of the financial year.

Moreover, the audited statements, along with the directors' report, must be sent to shareholders at least 14 days before the annual general meeting

Meanwhile, the yarn manufacturer reported a miraculous comeback in FY24, posting a profit of more than Tk 224 million after suffering a loss of Tk 17.33 million in FY23.

Its revenue also fell to Tk 309 million in FY24 from Tk 318 million the year before.

Despite an operating loss of Tk 81 million in FY24 due to higher production costs, the company reported a record profit for the year.

The yarn manufacturer claimed that interest income from Agrani Bank helped it earn the profit.

Last week, the company's board also decided to invest Tk 78 million in BMRE (Balancing, Modernization, Rehabilitation, and Expansion) at its factory.

Meanwhile, the stock of Al-Haj Textile, which started its business before the country's independence, closed at Tk 132.8 per share on Monday, rising 2 per cent from the previous session on the Dhaka Stock Exchange (DSE).

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