Coppertech’s listing on DSE goes cold over ‘anomalies’ in accounts

The Dhaka Stock Exchange or DSE has frozen the listing of Coppertech Industries Limited pending an investigation into alleged anomalies in its financial statement.

Officials at the premier bourse say they will agree to whatever decision regulators Securities and Exchange Commission or SEC may arrive at the end of the investigation by the Institute of Chartered Accountants of Bangladesh or ICAB.

The company raised Tk 200 million from the stock market after the SEC approved its initial public offering or IPO in December last year. It has got listed on Chittagong Stock Exchange or CSE.

The firm, however, has failed to start trading as the DSE denied it listing “in order to ensure good governance and safety of money”, according to the bourse’s Director Rakibur Rahman.

ICAB has been tasked with the investigation after the allegations surfaced that the company had “falsified” its prospectus.

Coppertech has denied the allegation of providing false information in its prospectus, but there appears to be no possibility of its trading starting anytime soon.

The DSE did not list it within the legal deadline of 75 days for companies to get listed after subscription. Coppertech’s deadline for listing ended on Sunday.

“In line with the law, it can be said that the company’s listing has been halted,” Rakibur told bdnews24.com.

Asked what will happen now, a DSE official said the entire issue depends on the SEC.

“DSE will enlist it and trading will start if the SEC asks it to do so. But if the SEC doesn’t issue any instruction on the issue, there will be no listing or trading for Coppertech on DSE.

“It will have to return the investors’ money in that case,” the DSE official said. He requested not to be named as he was not authorised to speak over the issue now.

CSE Chairman Mohammad Shamim Chowdhury said Coppertech is listed on the stock exchange but has not started trading.

The CSE will clear trading of Coppertech shares once the trading starts on the DSE, he added.

SEC spokesperson Saifur Rahman said he did not have any update on Coppertech.

It will be unprecedented for Bangladesh’s stock market if Coppertech finally fails to get DSE listing and if it returns money to the investors.

No company in Bangladesh has ever before returned money of the investors even though many firms with existence on paper only had drawn money from the market by providing false information.

Considering the incidents of fraud in the past, the Financial Reporting Council asked the ICAB to check audit reports of Coppertech.

“The scrutiny of the alleged wrong information in Coppertech’s audit report is under way. We’ve asked the ICAB to let us know about the matter. ICAB’s disciplinary committee is checking the issue,” FRC Chairman CQK Mustaq Ahmed told bdnews24.com.

ICAB Director Saiful Islam has declined comment on the investigation before it ends.

Comments of Coppertech’s auditor Ahmed and Akhter were not available.

Read Coppertech stories in Bangla

ডিএসইতে কপারটেকের তালিকাভুক্তি আটকেই থাকল

হিসাবে ‘গরমিল’, অনিশ্চয়তায় কপারটেকের তালিকাভুক্তি

‘ANOMALIES’

In Coppertech’s IPO prospectus, “anomalies” have been found in accounts of receivable cash and debt.

Its outstanding credit has been shown more than the actual amount while repayment of interest rose unnaturally even after a drop in the amount of loan.

The account of stored goods was also abnormally high against its turnover.

According to the prospectus, the company’s receivable cash was about Tk 28 million in the beginning of 2018-19 financial year.

The receivable amount at the closing was shown Tk 27 million, but it should have been Tk 90.8 million, since it sold goods worth about Tk 526.6 million and collected Tk 503.6 million while advance sales stood about Tk 39.9 million in that fiscal year.  

The prospectus showed a total debt of Tk 53.3 million, but the amount should be Tk 42.2 million considering the money paid for purchase of raw materials.

With its plant at Madhabpur in Habiganj, the firm raised its paid-up capital overnight 15 folds to Tk 400 million one and a half years before applying for IPO.

‘WAR AGAINST BAD COMPANIES’ 

A DSE official requesting anonymity told bdnews24.com that they face pressure to enlist firms and that names of government high-ups are used during lobbying.

“We believe a certain quarter is trying to hurt the government’s image by using the names of people who can never be involved with such a job,” he said.    

“It’s our war! We are alert now to prevent bad companies from entering the market and duping the investors,” the official said, adding that everything will finally depend on the SEC and FRC.