Shurwid Industries' stocks tumbled on Monday, a day after the securities regulator has decided to file a case against its board of directors for recommending dividends for the fiscal year 2018-19 in an attempt to manipulate its share prices.
The PVC product manufacturer's share price plunged 9.65 per cent to close at Tk 20.60 each on Monday. The company was also the day's top loser on the Dhaka Stock Exchange (DSE).
The board of directors of Shurwid Industries declared 10 per cent cash dividend on November 3, 2019 for the year ended on June 30, 2019 despite no financial ability to disburse dividend.
However, the company did not pay the dividend to shareholders, prompting the Bangladesh Securities and Exchange Commission (BSEC) to form an enquiry committee.
The committee found that Shurwid Industries recommended the dividend despite not having the capability to pay the cash dividend.
"The board of directors of the company announced the dividend to cheat people," said a BSEC statement on Sunday.
So, the decision was taken to file a case against the then board of directors, said the BSEC statement.
The decision came at a commission meeting held on Sunday chaired by Prof Shibli Rubayat-Ul-Islam, chairman of the BSEC.
Following the news, the investors sold its shares heavily on Monday.
The company also did not publish its quarterly financial reports this year.
As per the latest quarterly financial reports published for the January-March 2020, its earnings per share (EPS) were Tk 0.11 as against Tk 0.44 for January-March 2019.
Shurwid Industries, which was listed on the DSE in 2014, raised Tk 140 million by issuing 14 million ordinary shares at an offer price of Tk 10 each under the fixed price method.
The company's paid-up capital is Tk 573.68 million and authorised capital is Tk 1.0 billion, while the total number of securities is 57.36 million.
The sponsor-directors held only 12.01 per cent stake in the company, while institutional investors own 16.94 per cent and the general public held 71.05 per cent as of August 31, 2021, the DSE data showed.
The principal activities of the company are to carry on the business to produce PVC film (Pharma grade) of medicine packaging (especially for tablet & capsule) for pharmaceuticals industries and PP film of food packaging for food industries.