Decision on Coppertech listing likely today despite incomplete audit review

Staff Correspondent | Published at 12:00am on May 23, 2019

The Dhaka Stock Exchange will decide on listing of Coppertech Industries today although a probe body of the bourse and the Institute of Chartered Accountants Bangladesh are yet to complete their review reports on the company’s financial accounts.
The DSE’s hurry to decide on the company’s listing before clearing allegations against it has raised questions among the stakeholders.
The Financial Reporting Council on May 14 asked the ICAB to re-audit financial statements of Coppertech and submit the report within 7 working days after allegations of fabrication of financial data had been raised against the company.
The ICAB on Monday informed the FRC that it was unable to re-audit financial statements of Coppertech as the company’s auditor Ahmad and Akhtar refused to co-operate with ICAB.
The ICAB wanted various documents relating to Coppertech’s accounts, but the auditor did not agree to provide the documents.
The auditor showed various ‘illogical and contradictory’ reasons when it was asked to provide supporting documents relating to the re-audit, said ICAB officials.
They said that the auditor did not co-operate with the ICAB on the pretext that its partner was abroad.
The auditor also told ICAB to collect necessary documents from the Bangladesh Securities and Exchange Commission frustrating the ICAB, they said.
Such excuses gave the impression that there was something wrong in the reports and auditing and that should be brought to book, an ICAB office bearer told New Age.
So, the ICAB was unable to continue their investigation and submit reports to the FRC, he said.
Officials at the FRC confirmed that it received a letter from the ICAB where they mentioned that the auditor did not extend cooperation to them. They also said that the auditor sought more time from the ICAB as its partner was abroad.
DSE on May 9 decided to review initial public offering application of Coppertech Industries as the company allegedly provided fabricated information in its financial statements and IPO prospectus.
The DSE board on the day asked its management to investigate the issue and submit report within a week.
DSE officials said that the report would be submitted today before the board.
The DSE board might decide whether it would approve listing of Coppertech or not in line with the investigation report.
Sources in DSE said that there was pressure on the bourse to approve the listing of the company amid hectic lobbying from some powerful quarter.
When asked why the bourse was rushing to make decision, a senior DSE official said that there was an obligation of securities rules that a company would be given listing approval within 30 days of IPO subscription closure.
He also said that the ICAB would not provide any verdict against the company rather it would look into the auditor’s report and can take action against the auditor.
But, a DSE source said that the bourse had an option not to list the company and request the BSEC to scrap the IPO and order return of the investors’ money as listing of any dubious company would hurt investors at the bourse.
He said that an investigation report must be analysed and reviewed before making any decision.
The media earlier exposed a number of anomalies in the financial statements of Coppertech which went unnoticed to the regulators.
The BSEC approved initial public offerings of Coppertech without assessing the company’s statement thoroughly which was criticised by the market experts and investors.
If the DSE approved listing of the company, the investors may lose trust over the bourse and its efforts to find out anomalies in the IPO process, market experts said.