Regulatory Authority BSEC intends to take action against 16 shareholders of ACME Pesticides for acquiring 2.33 crore shares without making the required payments.
In a significant move, the Bangladesh Securities and Exchange Commission (BSEC) has announced plans to cancel the license of Shahjalal Equity Management, the issue manager of ACME Pesticides' Initial Public Offering (IPO), due to failures in ensuring compliance and due diligence.
The trouble for ACME Pesticides began when the BSEC identified a network involving the company's top management for facilitating questionable allocations during the IPO. Since the company's listing on the Dhaka Stock Exchange in 2021, multiple individuals and firms, including top officials of ACME Pesticides and 16 shareholders, have acquired shares exceeding 10% of the total share capital, often through irregular means.
The financial performance of ACME Pesticides has been declining over the years. In FY21, the company reported a net profit of Tk22.20 crore, but in the fiscal year 2024, it reported a loss of Tk10.27 crore and paid a token 0.25% cash dividend to shareholders. The case could set a precedent for how irregularities in the capital market are addressed in future.
The company has sought approval to extend the deadline for IPO fund utilisation until December 2025, but as of April 2025, nearly 32% of the raised funds remained unutilised, amounting to Tk9.51 crore including accrued interest.
Notable beneficiaries of the irregular share acquisitions include Matiur Rahman, former National Board of Revenue member, who received 37 lakh shares, and other entities such as Bengal Assets, Heritage Capital Management, Chittagong Pesticides, and Bikrampur Potato.
The BSEC is forwarding an inquiry report to the Anti-Corruption Commission regarding ACME Pesticides Limited, and the case may face further scrutiny if the Anti-Corruption Commission takes action. For the July-March period of FY25, ACME Pesticides reported a loss per share of Tk1.02.
On the trading floor, shares of ACME Pesticides dropped by 1.12% today, closing at Tk17.50 at the Dhaka Stock Exchange. The inquiry report recommends stern action against directors, officials, and placement shareholders of ACME Pesticides Limited for acquiring shares worth Tk23.39 crore without making any payment.
This development serves as a reminder of the importance of adhering to regulatory standards and due diligence in the capital market. The BSEC's decision to revoke the license of Shahjalal Equity Management sends a strong message that such irregularities will not be tolerated.
