Auditor flags Tk1.4cr dividend shortfall at Metro Spinning

The auditor of listed textile company Metro Spinning has identified a dividend shortfall of Tk1.40 crore in the firm's designated bank account, citing regulatory non-compliance and financial stress.

In his audit report, AK Gulam Kibria, partner of G Kibria & Co, Chartered Accountants, said Metro Spinning has a dividend payable amounting to Tk1.56 crore.

Dividend payable is a short-term liability on a company's balance sheet, representing profits declared by the board of directors to be paid to shareholders but not yet distributed in cash.

The auditor said the cash should be reserved in a separate bank account. Against the payable amount, the company has a balance of Tk15.64 lakh in its dividend bank account. As a result, there is a dividend shortfall of Tk1.40 crore in the company's bank account.

According to a directive of the Bangladesh Securities and Exchange Commission (BSEC), dividend payable or unclaimed dividends that remain unclaimed for a period of three years from the date of approval or the date of subscription must be transferred to the fund named the Capital Market Stabilisation Fund (CMSF).

However, the textile firm did not transfer unclaimed dividends amounting to Tk1.47 crore up to the 2019-2020 period to the said fund, which constitutes non-compliance with the BSEC directive.

In the auditor's report, the auditor drew attention to the company's financial statements.

The report said the company incurred a net loss of Tk12.23 crore during the year ended on 30 June 2025, and as of that date, the company's total retained earnings stood at a negative Tk58.37 crore.

"These events or conditions, along with other matters, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern," the auditor said.