STAR BUSINESS REPORT

Top executives, directors, auditors, and issue managers of Ring Shine Textiles are facing regulatory action after a share placement scandal came to light.

The Bangladesh Securities and Exchange Commission (BSEC) yesterday said the company fraudulently raised Tk 275 crore through a private placement of shares, but the funds were never deposited.

Rather, it artificially inflated the firm’s paid-up capital to Tk 285 crore and misled investors and the regulator.

After an investigation, the stock regulator yesterday said that it would forward the case to the Anti-Corruption Commission (ACC) and impose travel bans on more than a dozen individuals.

The travel ban covers former directors, managing directors, the executive director, chief financial officer, and company secretary. The BSEC accused them of submitting false information in the company’s initial public offering (IPO) prospectus.

The regulator made these decisions during a commission meeting at its headquarters in Dhaka.

The BSEC said it would bar the chief executives of two issue managers of the company, AFC Capital and CAPM Advisory, from taking part in any stock market activities for five years.

In the BSEC investigation, both firms were found to have submitted false information in due diligence certificates and IPO documents, eventually contributing to the fraudulent capital raising by Ring Shine.

The commission also began the process of cancelling their issue management licences.

In 2019, Ring Shine raised Tk 150 crore from the stock market through an IPO, in addition to the Tk 275 crore it claimed to have secured privately.

The BSEC will also refer four audit firms to the Financial Reporting Council (FRC) for certifying false financial statements covering the years 2015-16 through 2019-20. The firms are Ahmed and Akhter, Shiraz Khan Basak and Co, Mahfel Huq and Co, and ATA Khan and Co.