Ring Shine Textiles Limited on Sunday declared lay-off of its factory for one month within one year of listing on the country’s stock exchanges.
The company made its debut on the bourses on December 12, 2019 amid a spate of criticisms and various allegations against the company.
Ring Shine Textiles informed the Dhaka Stock Exchange on Sunday that the management decided to declare lay-off of the factory for one month, up to October 25, 2020, due to the worldwide impact of prevailing COVID-19 pandemic, declining orders from foreign buyers, and shortage of imported raw materials.
Usually the board of directors of a company makes any decision about factory lay-off.
Ring Shine Textiles company secretary Ashraf Ali told New Age that the company shut the company due to a shortage of raw materials and lack of orders from foreign buyers.
Asked about the reason for making lay-off decision without holding a board of directors meeting, Ashraf did not reply.
He said that the management of the company made the decision, which was necessary for the company.
Due to the factory lay-off, share prices of Ring Shine Textiles dropped by 8.97 per cent to Tk 7.1 each on Sunday.
The BSEC under the leadership of immediate past chairman M Khairul Hossain allowed Ring Shine Textiles to get listed on the stock exchanges despite the DSE’s reservations.
AFC Capital Limited and CAPM Advisory Limited were the issue manager and Mahfel Huq & Co was the auditor of the company’s IPO.
The company raised Tk 275 crore through issuance of placement shares from 2006 to 2012, which were allotted in 2018.
The share money deposits were withdrawn and utilised before it had turned into paid-up capital, which was also against the spirit of laws.
The company allowed raising highest Tk 150 crore through the fixed price method of IPO.
It also issued 6.5 crore bonus shares and reached its paid up capital to whopping Tk 500 crore that also made it difficult for the company to declare cash dividends in near future.
The Premier Bank in January this year informed the BSEC that Ring Shine Textiles’ key officials were unwilling to continue business and the bank requested the commission to take precautionary measures, market operators said.
They said that Ring Shine Textiles was a client of the bank.
The company declared loss of Tk 0.19 per share in January to March, 2020 against profit of Tk 0.33 per share in the same period in the previous year.
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