Some foreign shareholders and owners of Ring Shine Textiles Limited – a company operating in Bangladesh since 1997 – have written to Prime Minister Tarique Rahman seeking a meeting to present the firm’s ongoing crisis and request government support to protect the interests of public shareholders.
In the letter, the foreign investors said Ring Shine Textiles, a listed company that raised Tk150 crore through an initial public offering (IPO), is facing the threat of eviction due to a large volume of unpaid dues to the Bangladesh Export Processing Zones Authority (BEPZA).
They also noted that they have lost business operations of subsidiary garment units – Avant Grade Fashion and Shine Fashion Co (Pvt) Ltd.
Nine investors from Thailand, Taiwan, and Indonesia established the 100% export-oriented Ring Shine Textiles at the Dhaka Export Processing Zone (DEPZ).
Currently, two of the nine foreign investors remain stranded in Bangladesh because of travel bans since 2020, while others are reportedly avoiding travel to the country over fears of facing similar restrictions.
Aniruddho Pial, the current managing director of Ring Shine Textiles Limited, said the company had performed strongly in the ready-made garment sector and contributed significantly to the economy until 2019.
However, he said the company ran into trouble during the Covid-19 pandemic and has since struggled with a business slowdown, mounting debt burdens, growing dues to BEPZA, and a shortage of working capital.
Against this backdrop, the company’s foreign investors have sought a meeting with the prime minister to present the company’s current situation and seek government assistance to safeguard the interests of public shareholders.
“We have already received loan-rescheduling facilities from Bangladesh Bank. Now, as the central bank is forming a Tk40,000 crore special fund for sick and closed factories, we will seek financial assistance from the fund,” Pial said.
Controversial IPO listing
According to the letter, Ring Shine’s troubles began after a controversial IPO process allegedly involving FAR Group’s Abdul Kader Faruk and Indian textile trader Ashok Kumar Chirimar.
The investors described in detail how the disputed IPO process led to the company’s current crisis and the difficulties faced by the foreign shareholders.
Ring Shine entered the stock market in 2019 through a Tk150 crore IPO – one of the largest offerings in the textile sector. Before going public, the company increased its paid-up capital from less than Tk10 crore to more than Tk285 crore.
BSEC findings
Findings by the Bangladesh Securities and Exchange Commission (BSEC) revealed that a syndicate involving controversial tax official Matiur Rahman and FAR Group Chairman Abdul Kader Faruk allegedly embezzled hundreds of crores of taka by issuing new shares of Ring Shine Textiles without investing any funds.
According to the findings, the group allocated shares worth Tk112 crore at a face value of Tk10 each without depositing any money into the company’s account.
The BSEC later decided to seek travel bans on 13 individuals linked to the company, including sponsors, former directors, the managing director, executive director, chief financial officer, and company secretary, as well as Faruk and Chirimar.
Once a profitable company, Ring Shine’s financial condition deteriorated after its stock market listing. The company also suffered severe setbacks during the coronavirus pandemic as foreign buyers suspended orders amid weakening global demand.
When irregularities surrounding the IPO came to light, the BSEC froze the company’s unutilised IPO funds that were intended for business expansion and loan repayment.
Investors left in the dark
Ring Shine has also failed to publish financial statements for the fourth quarter of FY25 and the first three quarters of the current fiscal year, leaving investors unaware of the company’s financial condition for nearly a year.
According to previous reports by The Business Standard, BEPZA has initiated proceedings to cancel six additional lease agreements of Ring Shine for failing to clear outstanding dues.
The Dhaka EPZ office issued a notice expressing its intention to terminate the leases of plots no 157-163. Earlier, on 20 February 2025, BEPZA had cancelled leases for plots no 231-236 on similar grounds.
As of 25 January 2025, Ring Shine’s outstanding dues to BEPZA stood at around $16.19 million, against a deposit of only $2,54,945. Despite repeated reminders, the company has yet to clear the arrears.
In November last year, Bangladesh Bank allowed publicly listed Ring Shine Textiles to reschedule its loans for up to 10 years, including a two-year moratorium period.
The company also received an eight-year rescheduling facility for its working capital loans – including overdraft, cash credit, and forced loans – with a 2% down payment requirement, of which 1% was to be paid before rescheduling and the remaining 1% after six months.
Aniruddho said that government support would enable the foreign-owned company to resume full operations and help foreign investors save the firm, which in turn could restore confidence among foreign investors.
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