Investors suffer as RSRM, Aramit, Nurani factories stay shut

Prolonged closure of factories of three listed companies – Ratanpur Steel Re-Rolling Mills (RSRM), Nurani Dyeing & Sweater Limited, and Aramit Cement – has left investors frustrated and incurring losses.

The closures were disclosed through separate statements by the Dhaka Stock Exchange (DSE) authorities on its website yesterday.

The statements said DSE teams found that the factories of these companies were out of operation. The DSE teams visited RSRM on 21 August, Aramit on July 22, and Nurani on July21.

For investors who depend on dividends and share price gains, the extended shutdowns are increasingly painful. Investors of the two firms – Aramit and Nurani – haven't received any dividends for years. All the while, shares of the firms keep falling.

Asif Arman, a stock investor who put money in Nurani stocks, said, "I invest in companies mainly to get dividends. When the company falls into such trouble that its factory is closed for years, it surely gives a loss to its investors."

Nurani Dyeing's share price dropped to Tk 2.80 yesterday. It last issued a cash dividend of 2 percent in 2018. In fiscal year 2018-19, it paid a 10 percent stock dividend, and in the following fiscal year, it recommended a 10 percent stock dividend.

Investors of the two firms – Aramit and Nurani – haven't received any dividends for years. All the while, shares of the firms keep falling

The company was listed on the stock market in 2018, two years prior to its factory being closed after it fell into a financial crisis with allegations. Later, it was revealed that the company had become a loan defaulter at multiple banks.

Although it is a regulatory obligation to give the company secretary's mobile phone number on the DSE website, Nurani Dyeing did not provide the number, so it was not possible to communicate with the company.

Once a handsome dividend-paying company, RSRM's production has remained closed for a couple of years.

The company fell into trouble several years ago when it became a loan defaulter. Since 2020, its production has remained closed amid power supply cut-offs, as its electricity bill remains unpaid.

In 2022, a Chattogram court issued a rule barring the managing director of RSRM from leaving the country in connection with a case filed for defaulting on a loan.

Several other cases were filed against RSRM on grounds of cheque dishonour and loan collection worth Tk 1,500 crore from different banks.

RSRM took all these loans between 2010 and 2015 from banks and other financial institutions. However, the cases were filed between 2017 and 2019 as it did not repay any of the loans.

Due to the production shutdown, it is incurring losses year after year. The company hasn't published any financial reports in recent years.

Its share price stood at Tk 9.90 yesterday, which was above Tk 20 one year earlier. It provided a 10 percent cash dividend to its shareholders five years ago, in 2020.

However, speaking to The Daily Star yesterday, RSRM's Company Secretary Mohammad Moin Uddin said the factory is open but without production. "The electric line is okay now; the only problem is it has no working capital to run the factory."

But the company's defaulted loan situation remains the same, and it hasn't been able to pay any installments, he noted. "As a result, the company is not getting a bank loan to meet the demand for working capital."

If funds can be collected, it can purchase raw materials and restart the factory, he added.

The Bangladesh Securities and Exchange Commission already restructured the board of RSRM to revive its production.

But the prolonged closure has left investors frustrated. Many have left the company.

Al Mahmud Shujon, a stock investor, said he had investments in RSRM until last year. "Seeing no sign of rebound, I sold my shares, incurring a loss of Tk 20,000."

Meanwhile, Aramit started to incur losses after the political changeover last August. The company's Chairman, Rukhmila Zaman, is the wife of former land minister Saifuzzaman Chowdhury, who has been embroiled in embezzlement, land-grabbing, and corruption cases.

The mobile number of the Company Secretary of Aramit Cement was not found or was switched off. The company's share price stood at Tk 12.90 yesterday.

Investors have called on the government to take steps to help the companies rebound, restore jobs, and protect shareholder investments.

"If good governance existed in areas like financial reporting and auditing, investors could anticipate when a company is heading into trouble. The real problem is that no warning signs are visible until it is too late," Shujon said.

"Investors suffer suddenly when a company collapses, as share prices fall and dividends stop," he added, urging the stock exchange to actively monitor whether struggling listed firms show any signs of recovery.

"A company may incur losses at any time, but when there is no prospect of a rebound, that is what truly distresses investors," Arman echoed.