Alleged discrepancies in financial records and subsequent board restructuring and non-payment of dividends to investors over the past five years have done little to dissuade Uttara Finance and Investments from going for lavish expenditures this year.

The Bangladesh Bank had rejected the non-bank financial institution's (NBFI) financial report in 2019 and run an audit in 2020 through KPMG Bangladesh, which found discrepancies in financial records involving Tk 5,300 crore.

The central bank then removed the managing director and dissolved the board of directors in 2022 and formed a new board in January 2023. However, this apparently had little effect.

Established in 1995, the NBFI has not published any financial report since 2019, according to the Dhaka Stock Exchange.

For this, investors have neither received any dividend over the past five years nor have any idea about the NBFI's current financial condition.

In contrast, between 2014 and 2017, they had received 30 percent dividend. Even in 2018, it was 20 percent.

On top of it, the investors saw a huge erosion in the value of the NBFI's shares. In 2019, it was Tk 55. Yesterday, it stood at Tk 15.80.

General investors, institutional investors and foreign investors hold 8.09 crore shares of the company, which is around 61.56 percent of the total.

One of the investors, Abdul Mannan, said he had been drawn to the company for its good track record. "I don't know when I will get my investment back...I am in the dark on what is going on in the company," he said.

Amid all this, the NBFI's board last March approved the purchase of two 1,498cc Honda CR-V 1.5 Turbo or sport utility vehicles (SUVs) for around Tk 1.54 crore for its chairman and managing director this year.

The company also spent Tk 15.62 lakh on flying 25 officials from the top management and board to Cox's Bazar and providing their accommodation at one of the most expensive hotels for a "strategic business meeting" from March 7 to 9.

Some board members were accompanied by their spouses, who were also presented gifts, courtesy of the NBFI.

The Daily Star got in touch with the NBFI's current chairman, Mohammad Maksudur Rahman, last Saturday to comment on the matter.

He said the central bank had rejected the financial report of 2019 citing that it had not taken the KPMG findings into consideration.

"We did not get full support from the chief financial officers (CFOs) so we had to change the CFO a couple of times," he said.

They were "unnecessarily" delaying preparation of the reports and not focusing on the BB's concerns although they had assured doing so to the board, added Rahman.

Moreover, the company's financial data was in paper and not digitalised, for which compiling it was a lengthy process, he claimed.

An audit firm has been appointed to check the financials from 2003 to 2019, he said.

A new CFO will also join next month and hopefully the financial report of 2019 will be available within the next couple of months, he said.

Once the BB approves it, the financial reports for the subsequent years will be prepared within six months and the company will be able to clear the dividend payments, said Rahman.

The board has formed many internal policies and taken action against "wrongdoers", including filing cases against wilful defaulters, he said.

The company recovered over Tk 170 crore, which earlier could not be traced, and a former director also returned around Tk 420 crore, he said.

Regarding the vehicle purchase, he said six of the NBFI's vehicles had become "too old", for which the board approved selling them and buy new ones.

No unfair means were adopted in the purchase, said Rahman.

On the Cox's Bazar meeting, he acknowledged that most of the directors, excluding him and a couple of others, and top officials had attended it.

"Actually, the management placed the proposal…saying this type of event will improve the image of the company. So, we have accepted the proposal," he added.

The expenditures are unacceptable, a gross violation of corporate governance, said Toufic Ahmad Choudhury, director general of the Bangladesh Academy for Securities Markets, the academic wing of stock market regulator Bangladesh Securities and Exchange Commission (BSEC).

The regulators should look into the matter seriously and identify the NBFI's actual financial condition, added Choudhury, also a former director general of the Bangladesh Institute of Bank Management.

Rezaul Karim, an executive director and spokesperson of the BSEC, said the regulator would examine whether the NBFI was negligent in submitting financial reports and holding annual general meetings and would take steps soon.