Minori gets nod to join Fu Wang board

Bangladesh Securities and Exchange Commission has given Minori Bangladesh, a subsidiary of Japanese farming company Minori Co, the nod to join the Fu Wang Food board.

Minori’s proposal was approved at the commission meeting on Thursday. Following the approval, Minori will purchase shares of Fu Wang Food from the market and own a certain per cent of the company’s stake.

Sources said many companies had expressed interest in joining the Fu Wang Food board, but the commission finally accepted Minori’s proposal.

Minori will initially spend Tk 10 crore to help Fu Wang Food continue production, which has been hampered due to a lack of raw materials.

Besides, Minori recently invested around Tk 45 crore as working capital to help Emerald Oil, a listed company, resume production after four years. It will also help Emerald Oil with potential exports to Japan alongside operations in the local market.

BSEC restructured the Fu Wang Food board in July last year to protect the interests of investors. The stock market regulator nominated five independent directors for the company.

It reconstituted the board due to the failure of the sponsor directors to hold a minimum of 30 per cent stake in the company. A BSEC investigation also revealed the sponsor directors were involved in various financial irregularities.

Although the sponsor directors benefitted financially from the irregularities, the general investors were deprived of their desired profits.

Fu Wang Food’s profit declined in the first quarter of the current financial year to Tk 68.34 lakh, which was Tk 75.53 lakh in the same period of the previous year.

Also, in the last financial year, the company’s profit went down by 81.23 per cent compared to the previous year, reaching Tk 1.13 crore from Tk 6.06 crore. The company board recommended no dividend for the year ending on June 30, 2021.

Fu Wang Food’s share price declined by 6.44 per cent to Tk 21.8 on the Dhaka Stock Exchange on Thursday.

In the last one year, its share price moved between Tk 12.2 and Tk 24.5.

The company’s current market capitalisation is Tk 258 crore and paid-up capital Tk 110 crore. It has Tk 20 crore in surplus reserve.