P Alo-Daily Star propagated Minus-Two formula: Salman

Mon, Jul 20, 2009

Dhaka, July 20 (bdnews24.com)—Salman F Rahman has alleged that top-selling dailies Prothom Alo and The Daily Star helped the military-installed caretaker government in its attempt to implement the "Minus-Two formula' in the two years of emergency rule beginning in 2007.

The Beximco Group boss told a questioner at a news conference on Monday that these two newspapers were now trying to execute 'Minus-One formula' in clear a hint at prime minister Sheikh Hasina.

He claimed that they were now trying to slur the incumbent government and make things hard for it.

The controversial "Minus-Two formula" of the 2007-08 caretaker government sought the expulsion and exile of Hasina and former prime minister Khaleda Zia from politics and the country forever.

The vice chairman of Bangladesh's biggest business conglomerate, Beximco Group, read out a written statement at Hotel Sheraton and alleged that these two newspapers had been running a sustained campaign to destabilise the buoyant capital market and discouraging foreign investment.

Both the dailies in a statement have refuted the charges.

Salman alleged that the papers ran editorials, news analyses and front page reports propagating the Minus-Two theory.

They 'unleashed a vicious propaganda for many years' against the group, added Salman, who, along with Khaleda, Hasina and a host of businessmen and other top politicians, were detained in prison on corruption charges.

He also cited stories with captions such as, 'Beximco's bad debts stand at Tk 1,000 crore', 'Beximco deploys foreign company to suck out capital from the local market,' etc.

"Those were a few samples of the negative news presentation by the two dailies consistently for the past months. We consider this kind of journalism to be unethical and immoral and derogatory, harmful for the national integrity and solidarity," said Salman.

He added that the day he organised a meeting between Hasina and the leaders of the business community just before the December election, Prothom Alo published a news analysis and raised questions about her judgment.

"The only "offense" that I committed was that I, acting as the AL's chief's Adviser on Private Sector Development, issued the invitation and organised the crucial meeting attended by leaders of business."

"For the past few years, we have seen efforts – very conscious and often beyond anyone's comprehension – from these two newspapers to stifle our attempts to grow, create more jobs and expand our exports.

"...Which we kept ignoring and we are now compelled to bring the issue before the court of public."

He said his group generates thousands of highly-paid jobs in Bangladesh, and its goods and services are sold in many countries in the world, bringing in much-needed foreign exchange.

Salman added that none of the Beximco companies were defaulting on repayment of loans now and that they had run into credit line supply and other problems during emergency administration and past BNP-led government's terms.

"We had to negotiate a long and difficult way to reach where we are today. We have always been protecting our work force and shareholders carefully against odds," said Salman.

"We won't claim we always succeeded. On occasions, our failures were not solely due to wrong business moves.

"These two dailies have been deliberately trying to foil all our good moves and put up resistances in the way of our growth, export expansion and employment generation."

He also cited stories with captions such as, 'Beximco's bad debts stand at Tk 1,000 crore', 'Beximco deploys foreign company to suck out capital from the local market,' etc.

Asked why the two dailies have been behaving rather inimically with his companies, the Beximco vice chairman said, "That's what has puzzled me too. Please question them and find out why they are plotting relentlessly to harass me and my companies."

"It is true we have gone through ups and downs as our country has in all these decades. Nevertheless, we have tried to protect the interests of our workforce as well as our shareholders."

He said the dailies on July 10 reported 'incorrectly' that Bextex, a Beximco concern, had declared 10 percent stock dividend for 2008 out of revaluated reserves pursuant to revaluation of its lands, buildings and other assets. They also called Bextex shares as 'Junk Shares'.

"It is well known to all that Bextex has world class manufacturing facilities, 'blue chip' customer base, established brand both in the domestic and international market.

"In 2008 as per published figures, Bextex Sales was Tk 476 crore, Gross Profit was Tk 167 crore, Operating Profit was Tk 14 crore and after charging interest and depreciation loss was Tk 61 crores.

"We leave it to you to judge whether Bextex shares can be called 'Junk Shares' and the journalistic standards applied by these two newspapers," said Salman, who also highlighted the achievements of his group.

The former FBCCI chief said the six listed companies of the Group have a combined market capital of US$ 1.2 billion and enjoy the confidence of 1,52,000 shareholders.

"Today, despite all odds, we directly employ 35,000 people, with an annual turnover of Tk 16.5 billion. Of the total daily turnover on the Dhaka Stock Exchange, our group's shares constitute over 15%."

"On 18 January, 2009, Shinepukur Ceramics Ltd, one of the high-performing Beximco companies, signed a contract with a reputed German company to expand the export-oriented factory's capacity by 150 percent.

"The announcement of Tk 80 crore investment from our own funds was well received by the market. We said that this was just the beginning of many such plans as a result of our return to democracy and the investors' new-found confidence in the potential of Bangladesh market.

Salman, also the adviser to ruling Awami League chief on private sector development, said on Jan 26 an American investment firm signed a contract with Beximco Pharmaceuticals Ltd, committing to invest Tk 460 crore.

"The deal drew an unprecedented malicious response from the two newspapers. The day we announced one of the largest issues of capital in the history of Bangladesh, the Bangla language newspaper published a story under the headline 'Loss to investors feared—Beximco Pharma is selling shares to Gem Global'.

"Such a speculative story with serious potential repercussions on the market is unthinkable in any other country in the world.

"Anyone with good knowledge of the capital market will understand that the story was ill-motivated and lacked any substance. But common investors do get "shaky" by such propaganda.

"This is a gross violation of market regulations as defined in the Securities and Exchange Commission Ordinance," the Becimco boss contended.

The report caused the prices of Beximco Pharma shares to fall 0.59 per cent, he alleged. "Everyone knows that the existing shareholders are adversely affected when prices fall at this stage."

The following day, he said, The Daily Star published a similar report with similar content and referred to the price fall to claim that 'investors got shaky over Beximco Pharma's deal with US firm'.

Beximco supremo questioned the way the comments of the analysts were used in the stories, including that of a Dhaka University professor.

"Isn't it obvious that if a company does not earn then investors will suffer? And if the professor's claim is right then why is SEC allowing companies to issue stock or right shares?

"Aren't the interest of their investors jeopardized? Doesn't that increase the size of paid-up capital? Why doesn't the Prothom Alo then write reports that investors loss is feared every time a company announces such form of dividend?

Beximco's shares constitute 6.17 percent of the market capitalisation of DSE and has largely withstood onslaught from these two newspapers, the written statement said.

Since the end of the emergency rule, the Group has displayed its ambitions through deals to expand its ceramics manufacturing capacity and buy a 50 percent stake in Bangladesh's largest private airline GMG.

According to Salman, the newspapers also claimed that he in connivance with IFIC Bank and AB Bank got engaged in insider trading.

"This is a serious allegation, probably the worst allegation one can come up with in this context. I take this opportunity to unequivocally repudiate this allegation and invite both these newspapers to either substantiate their report or publish a retraction."

"All these are few glaring examples of the two newspapers writing negative stories to destabilise the capital market and oppose investment in Bangladesh. This is unethical journalism which goes against the interest of the country.

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