The Bangladesh Securities and Exchange Commission (BSEC) has sought an explanation from Golden Son Limited about its sales revenue and term loans for the last three years.
The stock market regulator issued a letter in this regard last week.
Golden Son Ltd, which produces garment accessories, household items, screws, electric fans, and plastic toys for the local market, has been listed on the Dhaka Stock Exchange (DSE) since 2007. The paid-up capital of the company is Tk171.73 crores.
The company has shown that its net sales revenue was Tk60.23 crores in 2019, Tk62.84 crores in 2020, and Tk87.62 crores in 2021.
The commission has sought the bank certificate against sales revenue for the last three years and the bank statement of the company where the sales proceeds had been deposited for the aforesaid period.
The regulator also observed that the long-term loan and short-term borrowing have significantly increased in the last two years which are a potential threat for the company's future growth and sustainability.
As per financial statements, released on 30 June 2021, the long-term loan for the company stood at Tk223 crores, which was Tk181.37 crores in the previous year.
During the period, short-term loans stood at Tk141.66 crores from Tk140.39 crores.
The company borrowed funds from various banks for the acquisition of non-current assets and working capital as well.
The company may face difficulties due to unfavourable movements in the interest rate and monetary policy that may result in short-term crunch and cash flow crises.
The commission is highly doubtful and concerned about the ongoing status of the company.
On 30 June 2021, the receivables of the company stood at 256.07 crores, which was Tk178.96 crores as of 30 June 2020. The commission sought details along with the names of 20 customers.
Besides, the commission observed that its turnover, gross profit and net profit have increased significantly.
The commission has sought all the documents in detail within ten working days.
The sponsors and directors of the company jointly hold 38.98% shares while institutional investors hold 17.19% and general investors account for 43.83% shares as of 31 December 2021.
The last trading share price of the company was Tk22.20 at the Dhaka stock exchange on Thursday.
Reached for a response, Md Ayinuddin, secretary of Golden Son, refused to comment on BSEC seeking information regarding the company's financials.