Mark Bangladesh Shilpa & Engineering

I remember this company, better known as Mark Shoes, from my days in investment banking in mid to late 1990s.

In the run up to its IPO, Mark Shoes put out a stream of misinformation and fake news in the press, such as – Mark Shoes is the largest shoe manufacturer in Bangladesh (or was it Asia/the World?), biggest sub-contracting supplier of shoes to Bata (what they sold was mainly rubber sandals), their workers were either Quran-e-Hafez or expert shoemakers (unclear whether this was mutually exclusive), a senior director of Bata Global said Mark Shoes was one of the best shoe companies in the world (Bata officially refuted this claim in the press). The Chairman, Imam Mulkutur Rahman, projected himself as a Pir of some sort (hence the Imam moniker). He used to move around Motijheel with bodyguards!

Peregrine Securities (Hong Kong based securities firm which went belly up in the late 1990s) underwrote the IPO of this dubious company, touting it as a great investment opportunity to the investing public. After the stock market crash of 1996, GOB had Marks Shoes investigated. Amongst many fraudulent anomalies, it was found that around 10 of Mark’s reported 12 manufacturing units did not exist!

If I and others could spot a fraud company, why couldn’t the SEC? On the contrary, I saw the Imam being received and treated like a VIP at the SEC. Their IPO application was processed quicker than usual, with permission granted to offer the shares at a premium, something quite difficult to get approval for in those days. I do not know if any investigation was conducted to unearth how such a fraudulent company received SEC approval for an IPO which subsequently caused losses to many investors, especially the small investors.