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.
















