DSE launches inquiry into reported huge loss of ACI’s subsidiary

Dhaka Stock Exchange (DSE) has launched an inquiry committee to unearth the reason why ACI Logistics Limited, or Swapno, a chain super shop brand, being the subsidiary of ACI Ltd has been incurring huge losses and gobbling up profit of its parent company.

A decade of loss making record since its inception, Shwapno has weighed on the profitability of ACI Ltd resulting in registering loss for the parent company ACI as a consequence. The situation aggrieved ACI’s shareholders, as its prices in the DSE fell nearly Tk125 in a year.

The DSE formed a five-member committee on Tuesday which will be led by its director Justice Siddiqur Rahman Miah, top sources at the DSE said.

The DSE inquiry committee was asked to submit their report within 15 working days. 

“Higher officials of ACI Limited will be served notices soon for a hearing by the committee,” Md. Rakibur Rahman director of  the Dhaka Stock Exchange Ltd told the Dhaka Tribune on Wednesday.

“ACI is a big listed company in our market. We are getting allegations against the company from different quarters, including one from the Dhaka Bank Securities. We formed an inquiry committee to investigate the allegation of the securities.”

Earlier, an investor complained to the Bangladesh Securities and Exchange Commission (BSEC) and to the board of DSE about the alleged irregularities of ACI, and ACI Logistics Ltd.

‘Shwapno’ is the brand name of ACI Logistics, and the super shop owns 76% of  the logistics company. The super shop ‘Shwapno’ has been running at a loss since its inception in 2008. In the 2017-18 fiscal year, ‘Shwapno’ incurred loss of Tk135 crore, and its accumulated loss in the year stood at Tk 891 crore, according to annual report of ACI.

ACI Limited share prices have been declining  for the last one year, so has been its earning per share. On Wednesday, a share of ACI was traded  at Tk307.90, down from Tk 430 a year ago. ACI Limited disbursed 115% cash and 3.5% stock dividend to its shareholders last year.

According to the complaint of the Dhaka Bank Securities, the board of directors of ACI Limited have failed to confirm their legal duties and responsibilities and totally failed to protect the interest of small shareholders of ACI Limited by carrying such a losing concern like ACI Logistics Ltd.

Mohammad Ali also Chief executive officer of the Dhaka Bank Securities Limited told the Dhaka Tribune: “Our concern is that a company having an accumulated loss of Tk 8,91 crore which is 24.75 times of its paid up capital reflects that the board of directors are not discharging their due responsibilities as entrusted to them by the shareholders. 

According to the financial statement posted on the DSE’s website, ACI Limited earnings per share (EPS) for the October-December quarter stood at Tk0.78 in the negative, in contrast to Tk5.44 a year earlier.

M Anis Ud Dowla, Chairman of ACI Limited said at the last AGM assured its shareholders not to get disappointed over the loss of ACI Logistics, saying the company (Shwapno) would make a turn around soon

With over 60 outlets, Shwapno is the biggest grocery chain in the country. The company was established in 2008. The company's accumulated losses  in 2016-17 was Tk759 crore , Tk556 crore in 2015, and Tk556 crore in 2014.

According to a financial statement posted on the DSE’s website, ACI Limited earnings per share (EPS) for the October-December quarter stood at Tk0.78 in the negative. EPS was Tk.1.26 for July-September 2018 against Tk.2.36 for July-September 2017. 

ACI in a statement posted on the DSE website cited a number of factors for the dismal earning situation of the company. They include currency devaluation, interest rate increase, decrease in share of profit from JVs and associates, purchase rate variance due to international price hike and high income tax expenses.