Citing losses, the board of directors of scam-hit Ring Shine Textiles (RSTL) has revoked the dividend declared for the financial year 2019–20.
The listed company in October 2020 had announced 1 per cent cash and 1 per cent stock dividend for FY20, but its shareholders did not approve the declared dividend at the annual general meeting (AGM) held on June 20 this year.
The company, as per a disclosure filed with the Dhaka Stock Exchange (DSE) on Sunday said following the repeal of the declared dividend no dividend will be considered for the fiscal 2019-20.
The textile firm, according to its revalued assets for the financial year 2019–20, had incurred losses in the fiscal under review, propelling it to cancel dividend for that year.
RSTL had not also paid any dividends in FY21 and FY22, and the company’s loss per share stood at Tk 1.54 in FY22.
The company’s financial state is still vulnerable, with the publicly traded company reporting a net loss of Tk 74.5 crore in the first nine months of the just concluded fiscal year of 2022-23, much higher than the loss of Tk 47 crore in the same period a year ago.
The textile manufacturer’s financial performance got worsened, as it posted a net loss per share of Tk 1.49 for the July-March of FY23 against the loss per share of Tk 0.94 for the corresponding period a year earlier.
In the third quarter (January-March) of FY23, the listed firm posted a loss per share of Tk 0.73, a decline from loss Tk 0.59 for the same period in FY22.
The company’s net operating cash flow per share (NOCFPS) also deteriorated, with a negative value of Tk 0.13 for July-March of FY23, compared to Tk 0.83 negative in the same period last fiscal. The textile company’s net asset value (NAV) per share remained negative, amounting to Tk 3.94 as on March 31, 2023.
Earlier on April 18 this year, The Business Post carried a news report that the top management of RSTL had laundered nearly Tk 2,000 crore in the last 22 years utilising a myriad of financial anomalies, with the help of its now former managing director Sung Wey Min, an Indonesian citizen.
The staggering tale of gross irregularities came to light in a report, compiled by an inquiry committee and special auditor under the Bangladesh Securities and Exchange Commission (BSEC).
Documents had shown 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.
Ring Shine Textiles Ltd – founded back in 1997 – had 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 on June 30, 2019 and disbursed bonus shares to the respective shareholders and raised its paid-up capital to Tk 500 crore.
In the second year of its listing, 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.
That 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.
In a latest development, the Union Group of Companies had expressed its interest in acquiring Ring Shine Textiles Ltd in 2022.
Shares of the company traded at Tk 9.80 each on Sunday, which has been trading at the same rate for the last 10 months.
