Aman Cotton Fibrous PLC has used only 10.31 per cent of the funds it raised through its initial public offering (IPO) in eight years, leaving Tk71.75 crore of the proceeds unused.
As of 31 July 2026, the company had utilised Tk8.25 crore of its Tk80 crore IPO proceeds, according to an audit certificate issued by G Kibria & Co Chartered Accountants on 12 August.
The company has kept Tk73 crore in fixed deposit receipts (FDRs), including Tk71.75 crore from the IPO proceeds and Tk1.25 crore from its own funds.
Of the FDRs, Tk38 crore was placed with First Security Islami Bank and Tk35 crore with Al-Arafah Islami Bank as of 31 July.
The auditor said no asset had been procured, imported or constructed using the IPO proceeds as of the reporting date. The company said the funds were temporarily placed in FDRs and would later be used for machinery acquisition.
Aman Cotton was required to utilise the entire IPO proceeds within one year of receiving the funds, with the deadline expiring in August 2019.
The company’s board has now extended the utilisation period until 31 December 2028 or the company’s 2028 annual general meeting (AGM), whichever comes first, for machinery acquisition and business expansion.
Meanwhile, the company transferred Tk18.51 crore as an inter-company loan to its sister concerns. The same amount was later transferred back from the sister concerns to the company’s current deposit accounts from time to time.
The auditor recommended that the company obtain shareholders’ approval at the AGM for such investments and transactions.
The FDRs had grown to Tk83.76 crore as of 31 July, comprising Tk73 crore in principal and Tk10.76 crore in interest, according to bank statements reviewed by the auditor.
The company also earned interest income from the FDRs, including Tk1.21 crore from Commercial Bank of Ceylon and several amounts from Al-Arafah Islami Bank during 2025 and 2026.
The auditor said the interest income was fully utilised for the company’s regular business operations.
The audit certificate also noted that the Bangladesh Securities and Exchange Commission (BSEC) instructed the concerned banks in April 2023 to suspend transactions in the FDR accounts.
However, the Appellate Division of the Supreme Court later stayed proceedings related to the BSEC letter pending disposal of the appeal.
Of the IPO proceeds allocated for specific purposes, Aman Cotton completed its committed loan repayment of Tk4.77 crore.
The company also utilised Tk3.48 crore, or 99.46 per cent, of the amount allocated for IPO expenses as of 31 July 2026.
The auditor certified that the IPO proceeds used so far were spent for the purposes specified in the company’s prospectus.
