The Bangladesh Securities and Exchange Commission on Tuesday rejected the initial public offering proposals of two companies — Beka Garments and Textile Limited and SF Textile Industries — for showing inflated revenues and profits.
BSEC officials said that both companies ‘doctored’ their financial statements and presented rosy pictures to obtain IPO approvals.
The commission found that the companies inflated revenues and profits and overstated inventories and assets in their financial statements.
The company showed Tk 13.19 crore in profits in its financial year 2019. It also showed Tk 216.34 crore in sales and Tk 271.88 crore in total assets in the financial year.
According to the IPO prospectus, the principal activities of Beka Garments are to carry import, export, manufacturing, printing, dyeing, washing, embossing and trading of different types of readymade garments, knitwear, shirts, paints and other wearing apparels.
SF Textile showed net profit after tax of Tk 21.33 crore for the year 2019 and Tk 21.7 crore for the year 2018.
It also showed Tk 175.81 crore in sales and Tk 319.02 crore in total assets in the year 2019.
The principal activities of SF Textile are to carry on the business of spinning mills to manufacture all types of cotton,
viscose and CVC yarn for export to 100 per cent export-oriented dyeing or textiles industries and export thereof, according to the company’s IPO prospectus.
Chartered accountant Shiraz Khan Basak and Co is the auditor of the two companies.
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