The High Court has reconstructed the board of directors of Envoy Textiles and made retired justice Moyeenul Islam Chowdhury as its chairman for an interim period until the shareholders of the leading denim manufacturers are disposed of disputes, the company said in a filing on the stock exchange on Sunday.
The court made the verdict on 25 August, following a case filed by its shareholder-directors Abdus Salam Murshedy and his family members, against other directors.
As per the apex court order, the company's former Chairman Kutubuddin Ahmed will act as vice-chairman, while his son Tanvir Ahmed as managing director and former Managing Director Abdus Salam Murshedy as board member and his daughter Shehrin Salam Oishee as deputy managing director of the new board.
Kutubuddin's wife Rashida Ahmed, Salam Murshedy's wife Sharmin Salam, advocate Shafiqur Rahman and chartered accountant Fakhruddin Ahmed have also been named as members of the new board.
The case was filed under section 233 of the Companies Act, 1994, on 22 June this year, in which the plaintiffs challenged some amendments in the company's articles of association, the appointment of three additional board members, an independent director and a meeting notice.
According to the company's statement, sponsor-director Kutubuddin Ahmed and his family hold 34.06% shares of the company and Abdus Salam Murshedy's family and their associate companies own 23.87% shares.
The legal battle over supremacy in Envoy Textiles Limited, which is the world's very first LEED-certified platinum denim mill, started after a separation of Kutubuddin Ahmed from Envoy Textiles' parent Envoy Group.
Kutubuddin's separation from Envoy Group
On 9 March this year, Envoy Group's founder Kutubuddin Ahmed left the business group after handing over its ownership to his business partner Abdus Salam Murshedy.
They, however, agreed on running the group's flagship company – Envoy Textiles – independently.
In the meantime, after leaving the Envoy Group, Kutubuddin and his family increased their holdings in Envoy Textiles.
According to DSE data, in a single day of March, Kutubuddin Ahmed, his son Tanvir Ahmed, and his daughter Sumayyah Ahmed bought 2.61%, 7.12%, and 2.61% shares respectively from other institutional investors.
At that time Abdus Salam Murshedy told the Business Standard "he does not see any problem with Kutubuddin Ahmed and his family members' increasing holding in Envoy Textiles".
He mentioned that Kutubuddin got a lot of money by handing over the ownership of Envoy Group and he is investing that money in the listed textile company.
Currently, Envoy Textiles' paid-up capital is Tk167.73 crore. The company raised Tk90 crore from the capital market by issuing 30 crore shares in 2012 to expand its business.
Envoy Group, which started its journey in 1984 with a business in the garment sector, now has 40 companies. In all, these companies have an annual turnover of more than $400 million.