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Beximco Pharma seeks to free itself from group entities' troubles
Beximco Pharmaceuticals is set to overhaul its board and sever a key link with its embattled sponsor group as the drug maker seeks to shield its business and investors from the political fallout surrounding Vice Chairman Salman F Rahman. Mr Rahman has agreed to step down from the board after the c
Beximco Pharma seeks to free itself from group entities' troubles
Beximco Pharmaceuticals is set to overhaul its board and sever a key link with its embattled sponsor group as the drug maker seeks to shield its business and investors from the political fallout surrounding Vice Chairman Salman F Rahman.
Mr Rahman has agreed to step down from the board after the company informed the Bangladesh Securities and Exchange Commission (BSEC) that his continued involvement could hamper business and shareholders' interests.
His departure would mark a significant shift in governance for one of the country's largest listed drug makers, whose corporate fortunes have increasingly been overshadowed by the legal and financial troubles that have entangled the Beximco Group, market operators said.
BSEC Executive Director and spokesperson Md Abul Kalam said Beximco Pharma had recently sent a letter to the regulator regarding the restructuring of its board.
However, he said the restructuring process would depend entirely on the company, including decisions on who would remain on the board and who would step down.
"When the appointment of independent directors comes before the regulator, the commission will examine whether the proposed candidates meet the criteria," Mr Kalam told The Financial Express.
Mr Rahman, former private industry and investment adviser to the Awami League government, has remained in custody since his arrest in August 2024 following the political changeover. He is currently under investigation by the Anti-Corruption Commission (ACC) in several money-laundering cases.
Mr Rahman's continued physical absence from board meetings has emerged as a concern for investors, particularly foreign investors, amid the changed political and regulatory environment.
The reconstituted board, as proposed by the company, would comprise three sponsor-group directors, four independent directors, one director nominated by IFIC Bank and the managing director as an ex-officio director, according to BSEC sources.
The securities regulator has reportedly responded positively to the proposed structure.
The new structure would have the sponsor group's representation reduced while the number of independent directors would increase amid investors' demand for stronger corporate governance and a greater distance from the Beximco Group.
Foreign shareholders, who hold a significant 26.90 per cent stake in Beximco Pharmaceuticals, reportedly supported Mr Rahman's removal from its board in the interest of the company.
Initially, the BSEC invited foreign investors to take board seats, but they declined, prompting the regulator to move towards increasing the number of independent directors, according to a BSEC official requesting anonymity.
Dual-listed on the London Stock Exchange's Alternative Investment Market (AIM), Beximco Pharma must subject all incoming directors to standard international due diligence. The vetting process is expected to take four to six weeks.
Governance key to investor confidence
Market operators said the key issue is not merely the departure of an individual director, but whether the reconstituted board can exercise greater independence, strengthen oversight and protect investors' interests.
Salim Afzal Shawon, head of research at BRAC EPL Stock Brokerage, welcomed the move, saying the proposed restructuring, if implemented properly, could help insulate Beximco Pharma's operating business from the wider group's governance and financial problems.
"The restructuring could send a positive signal to investors about the company's prospects, particularly if the new board can demonstrate greater independence, transparency and accountability.
"The key issue now is who will join the new board, attend board meetings physically and actively participate in decision-making," said Mr Shawon.
Company Secretary Mohammad Asad Ullah could not be reached for comment.
Earnings remain strong
The board restructuring comes at a critical time for Beximco Pharma. While the company has shown financial resilience, governance issues remain a major concern.
The company reported a profit of Tk 7.05 billion for the first nine months through March this year, up 34 per cent year-on-year, while revenue rose 13 per cent to Tk 41.42 billion during the period.
The drug maker's annual profit also jumped 19 per cent year-on-year to Tk 6.99 billion in FY25. The company declared a 47.5 per cent cash dividend for the year, compared with 40 per cent for the previous year.
Its earnings performance has stood in sharp contrast to the financial difficulties faced by some other entities within the Beximco Group, reflecting the strength and resilience of its core pharmaceutical business.
Unlike some group entities facing heavy debt burdens and liquidity pressure, Beximco Pharma has continued to generate strong revenue and profit from its operating business, supported by steady demand for medicines in both domestic and export markets.
London listing
The restructuring also carries additional significance because Beximco Pharma has an international investor base and is listed on the London Stock Exchange (LSE).
The foreign listing exposes the company to greater scrutiny by international investors, who typically place strong emphasis on transparency, board independence and timely financial reporting.
Meanwhile, trading in Beximco Pharma resumed on the LSE in June after a nearly six-month suspension due to the delay in the publication of its financial statements.
Beximco Pharma's stock closed at Tk 149.70 on Tuesday, gaining 1.42 per cent from the previous session at the Dhaka Stock Exchange.
Beximco Pharmaceuticals is set to overhaul its board and sever a key link with its embattled sponsor group as the drug maker seeks to shield its business and investors from the political fallout surrounding Vice Chairman Salman F Rahman.
Mr Rahman has agreed to step down from the board after the company informed the Bangladesh Securities and Exchange Commission (BSEC) that his continued involvement could hamper business and shareholders' interests.
His departure would mark a significant shift in governance for one of the country's largest listed drug makers, whose corporate fortunes have increasingly been overshadowed by the legal and financial troubles that have entangled the Beximco Group, market operators said.
BSEC Executive Director and spokesperson Md Abul Kalam said Beximco Pharma had recently sent a letter to the regulator regarding the restructuring of its board.
However, he said the restructuring process would depend entirely on the company, including decisions on who would remain on the board and who would step down.
"When the appointment of independent directors comes before the regulator, the commission will examine whether the proposed candidates meet the criteria," Mr Kalam told The Financial Express.
Mr Rahman, former private industry and investment adviser to the Awami League government, has remained in custody since his arrest in August 2024 following the political changeover. He is currently under investigation by the Anti-Corruption Commission (ACC) in several money-laundering cases.
Mr Rahman's continued physical absence from board meetings has emerged as a concern for investors, particularly foreign investors, amid the changed political and regulatory environment.
The reconstituted board, as proposed by the company, would comprise three sponsor-group directors, four independent directors, one director nominated by IFIC Bank and the managing director as an ex-officio director, according to BSEC sources.
The securities regulator has reportedly responded positively to the proposed structure.
The new structure would have the sponsor group's representation reduced while the number of independent directors would increase amid investors' demand for stronger corporate governance and a greater distance from the Beximco Group.
Foreign shareholders, who hold a significant 26.90 per cent stake in Beximco Pharmaceuticals, reportedly supported Mr Rahman's removal from its board in the interest of the company.
Initially, the BSEC invited foreign investors to take board seats, but they declined, prompting the regulator to move towards increasing the number of independent directors, according to a BSEC official requesting anonymity.
Dual-listed on the London Stock Exchange's Alternative Investment Market (AIM), Beximco Pharma must subject all incoming directors to standard international due diligence. The vetting process is expected to take four to six weeks.
Governance key to investor confidence
Market operators said the key issue is not merely the departure of an individual director, but whether the reconstituted board can exercise greater independence, strengthen oversight and protect investors' interests.
Salim Afzal Shawon, head of research at BRAC EPL Stock Brokerage, welcomed the move, saying the proposed restructuring, if implemented properly, could help insulate Beximco Pharma's operating business from the wider group's governance and financial problems.
"The restructuring could send a positive signal to investors about the company's prospects, particularly if the new board can demonstrate greater independence, transparency and accountability.
"The key issue now is who will join the new board, attend board meetings physically and actively participate in decision-making," said Mr Shawon.
Company Secretary Mohammad Asad Ullah could not be reached for comment.
Earnings remain strong
The board restructuring comes at a critical time for Beximco Pharma. While the company has shown financial resilience, governance issues remain a major concern.
The company reported a profit of Tk 7.05 billion for the first nine months through March this year, up 34 per cent year-on-year, while revenue rose 13 per cent to Tk 41.42 billion during the period.
The drug maker's annual profit also jumped 19 per cent year-on-year to Tk 6.99 billion in FY25. The company declared a 47.5 per cent cash dividend for the year, compared with 40 per cent for the previous year.
Its earnings performance has stood in sharp contrast to the financial difficulties faced by some other entities within the Beximco Group, reflecting the strength and resilience of its core pharmaceutical business.
Unlike some group entities facing heavy debt burdens and liquidity pressure, Beximco Pharma has continued to generate strong revenue and profit from its operating business, supported by steady demand for medicines in both domestic and export markets.
London listing
The restructuring also carries additional significance because Beximco Pharma has an international investor base and is listed on the London Stock Exchange (LSE).
The foreign listing exposes the company to greater scrutiny by international investors, who typically place strong emphasis on transparency, board independence and timely financial reporting.
Meanwhile, trading in Beximco Pharma resumed on the LSE in June after a nearly six-month suspension due to the delay in the publication of its financial statements.
Beximco Pharma's stock closed at Tk 149.70 on Tuesday, gaining 1.42 per cent from the previous session at the Dhaka Stock Exchange.
