Sunday, April 28, 2024
Aziz Pipes Ltd – an engineering sector company listed in the capital market – is tackling financial cases worth Tk 106.56 crore filed by two banks, which in turn is causing the company’s liability to go up.
Besides, the company does not have any documents for Tk 2.85 crore shown in Trade Receivables of the company.
This issue came to light through the auditor’s opinion, published on the Dhaka Stock Exchange's (DSE) website following a review of Aziz Pipes Ltd financial report for the year ending in June 30, 2023.
A qualified opinion, typical after a professional audit, indicates that the information provided may be limited in scope or that the company's adherence to generally accepted accounting principles may be questionable.
The auditor points out that the company is facing lawsuits worth Tk 72.50 crore until July 31, 2019 and Tk 34.05 crore until October 20, 2022, filed by Uttara Bank Ltd and Dutch Bangla Bank Ltd, respectively.
Speaking to The Business Post, Aziz Pipes Company Secretary Mokbul Hossain said, “Due to the increase in raw material prices and working capital shortage, bank loans could not be paid on time. This is why the company is facing loan cases.
“These cases are currently underway. We hope to win these lawsuits.”
The auditor says the company’s financial statements exhibit trade receivables of Tk 2.85 crore, but the management could not produce individual customer ledgers, as well as a year-wise or aging schedule of the party balances for scrutiny.
“Moreover, we received no response from the customers against the confirmation letters sent by us,” it added.
At the same time, the company showed property, plant, and equipment worth Tk 23.79 crore in the financial report of June 30, 2023, but could not show any documents in its favor to the auditor.
After 2020, the pipe-maker announced a suspension of production twice due to a raw material and working capital crunch. In a turnaround bid, Aziz Pipes had recently appointed a seasoned banker to the driving seat.
The company board appointed SM Hemayet Uddin, a 40-year veteran in the banking sector, as the managing director of the pipe manufacturer in December 2021.
After taking over, Hemayet Uddin approached the finance ministry to resolve the financial issues of the company. In a letter to the ministry, he sought government intervention to regularize or reschedule the bank loans.
The company secretary refused to comment in this regard.
After listing in the stock market, Aziz Pipes offered dividends to the stockholders regularly until 1998. After that, it could not pay dividends for a long time due to losses. It started paying dividends again in 2017. However, it did not pay dividends in 2022-23 due to recurring losses.
