BSEC launches probe into Bay Leasing’s ‘anomalies in earnings’

Bangladesh Securities and Exchange Commission (BSEC), the securities regulator, has formed a probe committee to look into the financial performance, inside trading, and unjustified dividend declaration of Bay Leasing and Investment Limited.

The three-member committee led by BSEC Additional Director Kawser Ali was asked to submit the report in 20 working days, according to a statement issued by the securities regulator Thursday.

Other members of the probe body include its Deputy Director Kazi AL Islam and Assistant Director Atikur Rhman.

Confirming the matter, BSEC Spokesman Mohammad Rezaul Karim said, “We want to investigate the non-bank financial institution’s (NBFI) recent financial performance, alleged insider trading in collaboration with directors, and its unjustified dividend declaration for the financial year ending in December 2021.”

“If any irregularities are found, we will take stern actions as per the security rules,” he added.

Bay Leasing’s board of directors reported earnings per share (EPS) of Tk 2.75 in its financial statement for the first nine months (January-September) of 2021.

However, it presented an EPS loss of Tk 3.74 for the remaining three months (October-December) of the calendar year. At the year-end, the company had also reported a consolidated negative EPS of Tk 0.99 against Tk 1.14 in the previous year.

Furthermore, the board of directors of the NBFI had recommended a 5 per cent stock dividend for its shareholders for the year 2021, the lowest in the past 13 years. Questions were raised from different quarters after the company revealed that it had incurred losses in the year 2021.

That financial performance presented by the NBFI in that year had seemed abnormal to the company’s investors and the securities regulator as well.

The company had also reported a consolidated net asset value (NAV) per share of Tk 17.82 and consolidated net operating cash flow per share (NOCFPS) of negative Tk 0.48 at the end of 2021 versus Tk 19.80 and Tk 5.94 respectively in the previous year.

According to a disclosure revealed by the non-bank financial institution, its consolidated earnings per share declined in that year owing to a fall in profit after tax, because it had to increase its provision by 1343.11 per cent against the 68.36 per cent rise in operational income.

Total provision kept against the lease, loans, and share investment stood at Tk 97.72 crore, it said.

Besides, the consolidated net operating cash flow per share dropped by 91.12 per cent due to the poor recovery from leases, loans, and encashment of bank deposits or treasury placements, the company added.

The shares of Bay Leasing were traded at Tk 23.90 each on the Dhaka Stock Exchange on Thursday.