The Bangladesh Securities and Exchange Commission (BSEC) has denied the right shares application of Gemini Seafood of Gemcon Group, citing the company’s failure to submit necessary sales documentation. This setback arises as the frozen shrimp and fish exporter sought to raise Tk128.21 crore (approximately $11 million USD) through right shares issuance.
In a disclosure made to the Dhaka Stock Exchange on Thursday, 3rd October, Gemini Seafood confirmed that BSEC’s decision stems from concerns over the company’s financial reporting. Specifically, a BSEC investigation found discrepancies, including fabricated sales figures amounting to Tk 27 crore (about $2.3 million USD).
Earlier this year, Gemini Seafood announced plans to issue over 20 million right shares to boost its paid-up capital, settle outstanding debts, and support business expansion. The shares were offered at a price of Tk 60 each ($0.50), including a premium of Tk 50 ($0.42) per share, at a ratio of 2R:1 (two shares for every existing share). However, BSEC found this premium to be inconsistent with the company’s financial standing.
The BSEC had initiated an inquiry in 2022 to investigate inflated revenue reports. The investigation revealed that Gemini Seafood falsified revenue figures in its local sales, claiming to have sold products to buyers who later reported that they had not received any goods from the company.
Despite this setback, Gemini Seafood remains a pioneer in the Bangladeshi seafood industry. Known for exporting certified organic shrimp, the company processes and exports frozen raw shrimp, cooked shrimp, and whitefish to key markets like the US, UK, Germany, and Russia. Lenk Frozen Food (Asia) and Gemini Seafood had a collaborative agreement back in 2023 to promote seafood practices, expand global market presence and improve backward linkage. Listed on the Dhaka Stock Exchange since 1985, the company has faced challenges but managed a significant recovery after the pandemic.
In the 2021-2022 fiscal year, the company’s revenue more than doubled, reaching Tk72.64 crore (around $5.7 million USD), and it saw a further rise to Tk77.65 crore (approximately $6.1 million USD) in FY23.
Despite these growth figures, Gemini’s stock performance has been volatile, with its share price reaching a peak of Tk 934.4 per share in early May 2023. On Thursday, the company’s share price stood at Tk230.40 ($1.92).
As the situation unfolds, stakeholders in the seafood sector and investors in Bangladesh will be closely monitoring Gemini Seafood’s response and next steps in addressing BSEC’s concerns.
