Audit raises red flags as three firms earn Tk11cr from parked IPO funds

A substantial portion of funds raised through Initial Public Offerings (IPOs) by three listed companies remains parked in Fixed Deposit Receipts (FDRs) rather than being invested in the projects for which the money was raised, according to recent audit reports.
Under existing regulations, IPO proceeds must be utilised within a specified timeframe for the purposes outlined in the prospectus. 
However, Aman Cotton Fibrous PLC, ACME Pesticides Limited and Associated Oxygen Limited have yet to fully utilise the funds raised from investors.
The audit reports show that the three companies collectively placed a significant share of their IPO proceeds in bank FDRs, earning nearly Tk11 crore in interest income. 
In some cases, portions of the funds were also used as collateral against other financial facilities, raising concerns over the intended use and transparency of IPO proceeds.
The companies, however, said fund utilisation was being carried out in line with decisions taken by their respective boards of directors.
When contacted, the company secretaries of Aman Cotton and Associated Oxygen gave similar responses, saying the utilisation of IPO funds is a matter determined by their boards and that they had no specific comments.
Bangladesh Securities and Exchange Commission (BSEC) spokesperson Abul Kalam said the regulator regularly encourages listed companies to utilise IPO proceeds for business expansion and project implementation.
“Failure to utilise IPO funds within the stipulated timeframe constitutes a violation of regulations. If misuse or misappropriation of funds is proven, BSEC can impose penalties,” he said.
“However, companies may seek extensions subject to shareholder approval and compliance with regulatory requirements,” BSEC spokesperson added.
Anam Ataullah Nayeem, president of the Bangladesh Capital Market Investors’ United National Alliance, said many companies present ambitious expansion plans during IPOs to attract investors but fail to implement them after raising funds.
“BSEC should publish a list of such companies and take legal action against them,” he said.
Nearly 90% of Aman Cotton's IPO funds remain unutilised
Aman Cotton Fibrous PLC raised about Tk80 crore through its IPO. 
As of 30 April, 2026, the company had utilised only Tk8.25 crore, or 10.31% of the proceeds, leaving around Tk71.75 crore, or 89.69%, unutilised.
According to the audit report, Tk73 crore of the unutilised funds was placed in FDRs, including Tk38 crore with First Security Islami Bank and Tk35 crore with Al-Arafah Islami Bank. 
The deposits generated approximately Tk9.27 crore in interest income, increasing the total FDR balance to around Tk82.27 crore.
The auditors noted in the financial statements that the FDRs had been pledged as lien against credit facilities enjoyed by Akin Carriers Limited. 
They also reported that the company transferred Tk18.51 crore to sister concerns as inter-company loans, although the same amount was later returned to the company's accounts.
Under the conditions of BSEC approval, the company was required to fully utilise its IPO proceeds by 2019. It has since extended the utilisation deadline to 31 December, 2028.
Around 31% of ACME Pesticides' IPO proceeds remain unutilised
ACME Pesticides Limited raised approximately Tk31.54 crore through its IPO. 
As of 30 November, 2025, the company had utilised Tk21.86 crore, or 69.31% of the proceeds, leaving Tk9.68 crore (30.69%) unutilised.
The company placed Tk8 crore of the unutilised funds in a three-month FDR with Southeast Bank and earned about Tk1.54 crore in interest income. 
Including accrued interest and other adjustments, the balance of unutilised IPO funds stood at approximately Tk9.68 crore.
The audit report also identified several irregularities in the use of IPO proceeds. 
Significant payments for factory construction, electrical installations and machinery procurement were reportedly made in cash, contrary to conditions stipulated in BSEC's consent letter.
The report further revealed that two of the company's FDR accounts had been frozen following a lawsuit filed by National Finance Limited. 
In addition, FDRs worth around Tk9.54 crore were pledged as lien against loans taken by Sharib Trade Sangsta (Pvt.) Limited.
The company had previously extended the deadline for utilising IPO proceeds until June 2025. 
Shareholders later approved a further extension until December 2027 at an Extraordinary General Meeting in July 2025. However, BSEC subsequently rejected the extension request.
Associated Oxygen also earned interest from FDRs
Associated Oxygen Limited raised Tk15 crore through its IPO. 
As of 30 April, 2026, only Tk0.24 crore, or 1.61% of the proceeds, remained unutilised. The company has already utilised approximately Tk14.76 crore, representing 98.39% of the IPO funds.
In November 2020, the company deposited Tk9.70 crore in FDRs with NRB Commercial Bank at an annual interest rate of 9%. The deposits were later encashed in phases and used for project implementation.
According to the audit report, the company earned approximately Tk0.34 crore in interest income from its IPO and FDR accounts. 
Part of the income was adjusted against machinery acquisition costs. The company has also spent more than Tk6.82 crore on constructing a new plant shed and store shed.