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“We have the power to take action against such activities. However, the FRC is yet to appoint the high official of our enforcement division, so we sent it to the stock market regulator,” said Md Sayeed Ahmed, executive director of the FRC, adding that a high official would soon be appointed.

The FRC found that Advent Pharma had taken approval from its investors to appoint an external auditor, K. M. Hasan & Co, for fiscal 2018-19.

However, K. M. Hasan & Co resigned before completing its audit. After that, Advent Pharma appointed Ahmed Zaker and Co without the approval of the general investors or the recommendation of the audit committee of the pharmaceuticals company.

This is a violation of the Companies Act and the corporate governance code, the FRC letter said.

Advent Pharma did not provide clear explanation in its annual report how the IPO proceeds were utilised. This was also left out by the auditor in the audit report.

Although there was a clear violation of corporate code, Podder & Associates provided a Corporate Governance Code Compliant Certificate, the FRC said.

The FRC recommended the BSEC suspend the appointment of Ahmed Zaker and Co as Advent Pharma’s auditor. Besides, the company’s financial report should be re-audited by a well-established chartered accountant firm.

Since the company’s board and audit committee did not work diligently on this issue, actions may be taken against them as well as Ahmed Zaker and Co, the FRC said.

The corporate governance compliance auditor could also be punished as it failed to provide Advent Pharma’s true status.

In 2018, Advent Pharma raised Tk 20 crore from the capital market through the IPO at an issuance price of Tk 10 per share.

Yesterday, the company’s shares traded at Tk 28.

“We have got the letter and it is already in our consideration,” said a BSEC official, on condition of anonymity. He added that actions would be taken soon.

Anwar Hossain, chief financial officer of Advent Pharma, did not receive phone calls.