Acme, Associated Oxygen fail to utilise IPO proceeds

Acme Pesticides Limited and Associated Oxygen Limited failed to fully utilise funds raised through their initial public offerings (IPOs) within the stipulated periods, leaving unused proceeds even after the deadlines expired.
In the case of Acme Pesticides, Tk7.16 crore of the IPO proceeds was paid in cash, which the auditor said was contrary to the conditions of the consent letter issued by the Bangladesh Securities and Exchange Commission (BSEC).
Associated Oxygen, meanwhile, kept a large portion of its IPO proceeds in fixed deposits (FDRs). It later encashed the FDRs and adjusted the funds against expenses previously paid from its own money.
A review of the auditors’ certificates of the two companies shows that both applied to the BSEC for extensions after the stipulated utilisation periods had expired. The commission rejected both applications.
When asked about the use of the IPO funds, Associated Oxygen Company Secretary Mostafizur Rahman said, “I do not know the details about this matter.”
Acme Pesticides Company Secretary Sabuj Kumar Ghosh and Chief Accountant Salim Reza did not respond to phone calls seeking comments. Acme’s unused IPO funds stand at Tk9.68 crore
As of 28 February 2026, Acme Pesticides had Tk9.68 crore in unused IPO proceeds, including interest.
The funds were kept in various FDRs and bank accounts. The company opened two three-month FDRs with Southeast Bank’s Le Méridien branch, with a total principal of Tk8 crore.
Some accounts linked to the IPO proceeds had also been frozen in connection with a money loan case filed by National Finance Limited. 
According to the auditor’s certificate, approximately Tk6.95 lakh in a current account and Tk3.58 crore and Tk5.96 crore in two FDRs had been frozen.
The certificate further said Tk3 crore and Tk5 crore of the two FDRs, respectively, had been lien-marked against loans of the concerned entity. 
Including interest, approximately Tk9.54 crore was reported as frozen against the National Finance loan.
According to the auditor’s certificate on Acme Pesticides’ utilisation of IPO proceeds up to 28 February 2026, the company had utilised Tk21.86 crore.

BSEC rejects Acme’s extension request
Before the original deadline for utilising its IPO proceeds expired, Acme Pesticides raised the issue of extending the period at its 14th annual general meeting (AGM). Shareholders approved extending the utilisation period until 30 June 2025.
However, the company failed to utilise the entire amount by the extended deadline.
At an extraordinary general meeting held on 30 July 2025, shareholders subsequently approved another extension, this time until 31 December 2027. The company informed the BSEC of the decision on 13 August 2025.
The BSEC, however, rejected the application for the extension and the related matter in a letter dated 24 February 2026.

Associated Oxygen kept IPO funds in FDRs
Associated Oxygen placed Tk9.7 crore of its IPO proceeds in a three-month FDR in November 2020 at an annual interest rate of 9%.
The company subsequently encashed Tk9.24 crore from the FDR by March 2022. Of this, Tk3.46 crore was encashed in March 2022, while the remaining Tk2 crore was encashed in April 2022.
The auditors also noted that the company transferred Tk15 crore from its IPO proceeds to its own bank account through pay orders between October and November 2020.

Own funds spent and later adjusted
Records for both companies show adjustments between IPO proceeds and their own funds.
Associated Oxygen paid Tk2.34 crore from its own bank account up to June 2021, which was later adjusted against the IPO proceeds.
The company also spent Tk66.09 lakh from its own bank account on constructing a new plant shed and store shed. The amount was later adjusted against funds obtained by encashing the FDR.
The records also show that the company used its own funds to repay bank loans and later adjusted those amounts by encashing the FDR. 
Interest earned on the IPO funds was also adjusted against the purchase of plant and machinery.
The final bill from the relevant supplier was approximately Tk4.90 crore. 
Of this, Tk4.27 crore had already been paid, including Tk3.43 crore from the IPO proceeds and approximately Tk84.5 lakh from the company’s own funds. Approximately Tk63.30 lakh remained payable to the supplier.

Complications over utilisation deadline with BSEC
Associated Oxygen’s deadline for submitting the report and utilising its IPO proceeds was 23 October 2022.
The company applied to the BSEC on 20 October 2022, seeking a five-month extension. 
It later applied for a second six-month extension in August 2023, seeking to extend the deadline until 30 September 2023.
However, the BSEC rejected the second extension application in a letter dated 16 November 2023.