The Bangladesh Securities and Exchange Commission (BSEC) has taken punitive action against the board and officials of Dominage Steel Building Systems Ltd over allegations of irregularities in the use of initial public offering (IPO) funds, concealment of information, and fraud.
The market regulator imposed fines of Tk 1 crore each on five directors of the company, while two former officials were fined Tk 5 lakh each. In total, penalties amounting to Tk 5.10 crore have been imposed on those concerned.
According to BSEC’s inspection and investigation report, multiple irregularities were found in the use of IPO proceeds. The company had raised Tk 30 crore through its IPO, which was supposed to be spent in specific sectors as outlined in the prospectus. However, the funds were not utilized in compliance with securities laws and regulatory requirements.
The report also found that changes in the utilization of IPO funds were made without obtaining proper prior approval from general shareholders, violating disclosure and governance norms.
As part of the enforcement action, BSEC fined Chairman Engr. Mohammad Shamsul Islam, Managing Director Engr. Mohammad Rafiqul Islam, and directors Sujit Saha, Rakibul Islam, and Abul Kalam Bhuiyan Tk 1 crore each.
In addition, former Chief Financial Officer (CFO) Md. Zillur Rahman and former Company Secretary Md. Jamir Hossain Chowdhury were each fined Tk 5 lakh. The accused have been directed to pay the fines to the Commission within 30 days through bank draft or pay order.
The investigation further revealed that the company resorted to fraudulent practices, including concealing material information from investors and collecting proxy votes using forged signatures to secure shareholder approval for changes in fund utilization.
One of the major irregularities involved the purchase of a dredger named “CSD Dominage-3” at a cost of Tk 14.73 crore without prior approval from general shareholders. The dredger, acquired in 2021, reportedly generated no business income over nearly three years up to 2024 and remained unused, according to the investigation findings.
Questions were also raised about the authenticity of information provided by the company regarding the dredger’s manufacturer and valuation. While company documents identified Sundarban Shipbuilders as the manufacturer, the firm later informed BSEC in writing that it had not produced the dredger, casting doubt on the credibility of disclosures made to the regulator and stock exchanges.
The probe also uncovered that two factories of the company located in Ashulia, Savar, and Palash in Narsingdi had remained closed for a prolonged period. The company failed to disclose this price-sensitive information to investors, in violation of regulatory requirements.
Furthermore, the investigation found evidence of misappropriation of approximately Tk 3.27 crore from IPO funds by inflating construction costs under the pretext of expanding factory sheds in Ashulia.
Dominage Steel raised capital from the stock market in 2020 through an IPO by issuing 3 crore shares at a face value of Tk 10 each, collecting Tk 30 crore. The proceeds were intended for building construction, electrical installations, purchase of plant and machinery, and meeting IPO-related expenses.
The ‘B’ category company has a paid-up capital of Tk 102.60 crore, with a total of 10.26 crore shares. As of August 31, 2026, sponsor-directors held 30.20 percent of the shares, institutional investors held 8.08 percent, foreign investors 0.02 percent, and general investors accounted for 61.70 percent.
