The Bangladesh Police – following a request from the Bangladesh Securities and Exchange Commission (BSEC) – have banned Ring Shine Textiles Ltd’s former managing director Sung Wey Min from travelling abroad.
This Indonesian citizen had allegedly laundered Tk 2,000 crore from Bangladesh in the last 22 years utilising a myriad of financial anomalies.
The Ring Shine Textiles Ltd (RSTL) on Tuesday informed its shareholders that the company’s Board of Directors has accepted Sung Wey Min’s resignation as the managing director of RSTL, which is located at Dhaka EPZ of Savar.
On April 18 this year, The Business Post published a report titled “Ring Shine Textiles’ Tale of Laundering Tk 2,000 crore.” This staggering tale of gross irregularities came to light in a report, compiled by an inquiry committee and special auditor under the BSEC.
Documents show that between 1998 and 2020, RSTL’s management laundered $124 million, or nearly Tk 1,242 crore through telegraphic transfers (TT), moving funds from corporate to overseas accounts of the then managing director, sponsor directors, and parties unknown.
Besides utilising an illegal trick called over-invoicing, the RSTL also
laundered Tk 845 crore in the name of procuring property, plant and equipment, and raw materials over five years that ended in June 2020.
In addition to this, an unknown businessman – who was operating the RSTL’s two accounts in banks – laundered Tk 19.2 crore and Tk 20 crore between October and November of 2019.
It should be noted that all the sponsors of the debt-burdened company hail from Indonesia, Singapore, and Taiwan.
As per the company’s IPO prospectus, Sung Wey Min, managing director of the company, who held a total of 18,591,650 shares of the RSTL, had his home city address at Leuwigajah, Cimahi, and Bandung in Indonesia.
Auniruddho Piaal, the company secretary of RSTL, confirmed that its managing director resigned on Thursday due to BSEC’s order on corporate good governance guidelines.
Brig Gen AHM Mokbul Hossain (retd) has been appointed as the company’s new managing director, effective from Wednesday. He represents RSTL’s new investor Wise Star Textile Mills Ltd, a private company run by Queen South Textile. The decision came during Ring Shine’s 78th board meeting, held on Tuesday.
BSEC Chairman Prof Shibli Rubayat Ul Islam had told The Business Post, “We have identified significant irregularities within the company and reported them to the Anti-Corruption Commission (ACC) chairman and the Bangladesh Financial Intelligence Unit (BFIU) chief.
“They will now take necessary action in this regard.”
Shibli further mentions that the BSEC has implemented measures through the Bangladesh Police to prevent the former managing director of RSTL from leaving Bangladesh.
Founded in 1997, Ring Shine Textiles Ltd raised Tk 150 crore from the market through an initial public offering (IPO) in 2019 to purchase machinery and repay bank loans.
The company had declared a stock dividend of 15 per cent for the shareholders on the audited financial statements as of June 30, 2019, disbursed bonus shares to the respective shareholders, and raised its paid-up capital to Tk 500 crore.
In the second year of its listing, the RSTL Savar plant in Dhaka’s Export Processing Zone announced a month-long closure in September 2020, citing a decrease in foreign buyers and a shortage in the import of raw materials due to the Covid-19 crisis.
This closing period was later extended three times. On January 27, 2021, the BSEC dissolved the company’s board of directors and tasked a new board with taking the necessary measures to restart the company.
In June 2021, the company declared it would resume production after almost nine months of closure. The company said it would resume production on June 13 at 25 per cent capacity.
The RSTL did not pay any dividends in FY21 and FY22, and the company’s loss per share stood at Tk 1.54 in the last FY.