Auditors flag IPO irregularities at Silva Pharma, timeline issues at Associated Oxygen

Audit reports of two listed companies – Silva Pharmaceuticals and Associated Oxygen – have identified inconsistencies in IPO fund utilisation, alongside delays and compliance gaps, according to stock exchange disclosures today.

For Silva Pharmaceuticals, the audit of IPO proceeds utilisation up to 28 February 2026 found that the company exceeded its approved budget for civil construction. Expenditure in this segment rose to Tk6.53 crore, or 104.26% of the allocated amount, resulting in excess spending of around Tk24 lakh without prior approval from shareholders or the regulator.

The report also highlighted a fund reallocation decision taken at the company's 9th Extraordinary General Meeting (EGM) on 30 December 2025, under which approximately Tk2.81 crore of unutilised funds from the "Machinery and Equipment" segment were transferred to working capital. However, no specific timeline for this reallocation was disclosed.

So far, 76.99% of the machinery allocation has been utilised, with the remaining funds shifted to working capital. The company has also fully utilised Tk9.9 crore earmarked for loan repayment and Tk2.44 crore for IPO-related expenses.

However, auditors observed inconsistencies in the use of working capital, noting that around Tk0.49 crore – 17.39% of the unspent portion – had been utilised in a manner not fully aligned with the original plan, despite EGM approval.

Overall, while IPO proceeds were largely used in line with the prospectus, auditors flagged deviations including excess construction spending, unclear fund reallocation, and partial inconsistencies in working capital use. The report also noted that utilisation was not completed within the originally stipulated timeline.

Meanwhile, Associated Oxygen has made substantial progress in utilising its IPO funds but faces issues related to deadlines and regulatory compliance. As per its prospectus, the deadline for submitting IPO utilisation reports expired in October 2022.

The company applied twice for deadline extensions; the first request was partially approved, while the second was rejected by the Bangladesh Securities and Exchange Commission (BSEC).

Associated Oxygen raised Tk15 crore through its IPO in September 2020. 

Overall, auditors said that although both companies largely adhered to their stated objectives in using IPO proceeds, gaps remain in governance, timeline compliance, and fund management. Addressing these issues through proper approvals and disclosures will be crucial to maintaining investor confidence.