FAS Finance & Investment Limited, a non-bank financial sector company listed in the capital market, has more liabilities than assets. As a result, the auditor expressed doubts about the survival of the company in the near future.
Recently, after reviewing the company's financial report for December 31, 2022, the auditor said, These conditions indicate that a material uncertainty exists on the company's ability to continue its operation in the foreseeable future unless arrangements are made to increase capital or to improve liquidity position.
According to the financial report of December 31, 2022, the company has been incurring losses for several years, and in accumulation, the total loss was Tk 1469.08 crore for the year ended December 31, 2022, and, as of that date, the company's total liabilities exceeded its total assets by Tk 1284.21 crore.
A qualified opinion is a statement issued after an audit is completed by a professional auditor, suggesting that the information provided is limited in scope or that the company being edited has not maintained generally accepted accounting principles.
The auditor said on the issue of the subsidiary company, the financial statements, advances, deposits, and prepayments amounting to Tk 27 lakh have been filed by FAS Capital Management Ltd., which has requested a lawyer to file a money suit against the concerned parties, and they have claimed that the amount has a high possibility of being recovered. However, they were not able to provide sufficient, appropriate documents.
Auditor said, We physically visited a number of mortgage properties against loans that were seized by the anti-corruption commission. We have seen that other people have taken rent from those properties.
As a result, we are in doubt about the right to sell these properties by FAS Finance Page 3 of 8 & Investment Ltd. In addition, the rent from those properties is not being collected by FAS Finance & Investment Ltd., the auditor added.
During the audit, the auditor said they could not confirm the share capital amount in the financial statements with Schedule-X, as the company has yet to update its annual return to the Registrar of Joint Stock Companies & Firms (RJSC) and a new board has been set by BSEC.
The auditor should draw attention to the classification of loans, advances, and leases in the financial statements, where 99.51 percent of loans, advances, and leases are classified.
We have reviewed several loan files from FFIL. Due to the non-recovery of those loans, the entity is suffering from huge, classified loans and liquidity crises, said the auditor.
According to sources, corporate practice in FAS Finance had been sound until 2012. However, after that, Abdul Matlub Ahmad and his family members started veering away from this company. Finally, they sold all company shares in 2014.
P&L International Ltd., Reptile Farm Ltd., and Nikita & Company Ltd., allegedly responsible for the downfall of the company, started buying FAS Finance shares.
In an interesting turn of events, P&L and Reptile Farm are owned by PK Halder, now fugitive in a case filed by the Anti-Corruption Commission (ACC).
A Bangladesh Bank investigation found that Halder had siphoned off Tk1,329 crore, after taking a series of loans under different names between 2015 and 2017.
PK Halder is the sole beneficiary of Tk1,181 crore, 66% of the company's total loan and investments during the first three quarters of 2019.
The paid-up capital of FAS Finance is Tk149.07 crore. Of the total shares, company sponsors and directors hold 13.20 per cent, institutional investors hold 9.67 per cent and general investors hold 77.13 per cent.
Its share price was Tk5 each at the end of last Thursday's trading session at the Dhaka Stock Exchange (DSE), while its face value per share was Tk10.
