BCIC disputes Q1 financial report of Miracle Industries

Bangladesh Chemical Industries Corporation (BCIC), a major shareholder of publicly listed Miracle Industries Limited, has raised questions over authenticity of the company's financial filing, officials said.

Contradicting the facts in the first quarter (July-September) financial report, the BCIC alleged that a group of people claiming themselves to be directors submitted the report to the Dhaka Stock Exchange (DSE) early this month without approval from its board.

In protest against such unethical practice, the country's largest corporation that owns 20 per cent stakes in the company wrote a letter to Bangladesh Securities and Exchange Commission (BSEC) on Thursday last, seeking its immediate intervention in this matter.

According to the letter, the plastic packaging manufacturer on December 03, 2019 submitted its first quarter financial report for FY '20 without consent of its board, which is a clear violation of section 20(1) of DSE (listing) regulations, 2015.

Citing the report, it said the volume of accumulated profit was shown at Tk 149 million. But the reality is different as the corporation did not find any existence of such profit and preserved money for depreciation, the letter reads.

Not only that, it was mentioned in the report that the publicly traded company has inventory worth over Tk 60 million, which also has no existence, the letter said.

Mentioning another major irregularity, it said the company took loans amounting to Tk 298 million from various individuals and adjusts it with the liabilities (Tk 191 million) without banking channel.

Contacted, BCIC chairman Md Haiul Quaium said the board of the company did not approve the report because the transactions shown in the report were made without banks, which is not recognised in the auditing procedure.

"I cannot understand how a listed company can submit a financial report without the consent of the board. So, we immediately sent a letter to the securities regulator for its quick action to this effect," said Mr Quaium, also chairman of the board of the company.

He said the issue was discussed at the company's 155th board meeting on December 02 last and it was ended without giving approval to the report.

"Even the so-called directors built two different companies besides its territory and are using its main gate as entrance to the two companies. It is horrible," he said.

He also said they requested the BSEC to investigate the irregularities in the financial report and take legal action against such malpractices.

The Miracle Industries was founded in 1995. It produces and exports a complete range of polypropylene woven sacks and flexible intermediate bulk containers.

Incorporated as a private limited company in 1993, the company was listed on Dhaka and Chittagong stock exchanges in 2000. Its manufacturing units are located in Sreepur and Gazipur.

The company's business line are manufacturing of different types of PP woven bag, liner bag with lamination and FIBC/Jumbo bags for bagging cement, fertiliser, salt, feeds, sugar food grains and chemicals.

According to the DSE data, the company has a paid-up capital of Tk330 million and belongs to the category 'B'. Sponsor-directors own 30 per cent shares while general investors hold 70 per cent shares in the company.

The Earnings per share (EPS) of the company was Tk 1.25 for July-September 2019 as against Tk 0.28 for July-September 2018 while Net asset value (NAV) per share was Tk 37.61 as on September 30, 2019 and Tk 38.85 as on June 30, 2019, the DSE data show.

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