Company denies any wrong doing
Newly-listed Paramount Textile Ltd has repaid around Tk 21 crore loan to its shareholder Paramount Spinning from its initial public offering fund by dodging the capital market regulator, BSEC sources said. The company in its IPO prospectus did not mention of having any such loan. Using the IPO fund other than the use of proceeds mentioned in the IPO prospectus is a violation of the BSEC rules.
The PTL in the prospectus said that it had no subsidiary or holding company. But, Paramount Holding Company and Paramount Spinning hold 17.78 per cent and 26.67 per cent shares of the company respectively.
In 2008, PTL received loan amounting to Tk 5.34 crore from Paramount Holding and Tk 6.99-crore loan from Paramount Spinning, and both of the loans were repaid by the company within June 30, 2010, said the company in its IPO prospectus.
A Chittagong Stock Exchange report submitted to the BSEC said that the company provided contradictory document regarding its IPO fund utilisation by fabricating financial documents.
The first statement regarding the IPO fund utilisation showed that the company repaid Tk 20.92 crore for term loan of Paramount Spinning under Standard Bank.
PTL company secretary Nuruzzaman Chawdhury, while talking to New Age, denied repaying any loan of Paramount Spinning with its IPO fund.
‘We have repaid only loan of Paramount Textile and the company did neither take over any loan of Paramount Spinning after 2010 nor we repaid any loan of it with the IPO fund of PTL, ’ he said.
The company again, following a CSE query, submitted another bank statement of Standard Bank showing that the loan amount was repaid for PTL.
According to Bangladesh Bank sources, there is no account in the name of PTL under Standard Bank.
Another report of Standard Bank said that PTL in 2010 took over Tk 23-crore loan of Paramount Spinning.
The report also showed that PTL managing director Shakhawat Hossain and director Alock Das was the personal guarantors of the loan of Paramount Spinning.
Both Shakhawat and Alock are also sponsor-directors of Paramount Spinning.
The company in its IPO prospectus did not mention about the ‘taking over’ of Paramount Spinning’s loan.
Experts in the financial reporting said that it was a clear violation of securities law as the company provided fabricated information in its IPO prospectus.
It is a clear intention to pay sponsor-directors liability in the other company by utilising IPO fund which is also violation of securities laws, they said.
On the other hand, providing fabricated information is equivalent to the fraudulent activities, the experts said.
The BSEC last year allowed PTL to raise capital of Tk 84 crore issuing 3 crore ordinary shares at an offer price of Tk 28 each including premium of Tk 18.
-With New Age input
