Thanks jdw514
Thank you for your sincere post and I respect your opinion. Now lets see if I can answer your question:-
1) Veltex Tax situation
Very good question and I am sure Veltex's audited financials must reflect that and auditors will make sure as to what Veltex submitted to IRS on any given tax year. That is why I am calling auditors and I was told no such documents exist that matches Veltex PR pump figures.
I have no idea as to how much Veltex is paying on net earning or reinvesting them and taking credit. The most important aspect of this fiasco is...since 1997 Matin is claiming to have an average of about $3 million in profit per year. Look at all the PR newswires than average them for 8 years. That is a cool $24 million in cash net profits over the past 7 years. When they made all these money as per their own claim, why they need to sell shares to buy a close out sweat shop in Bangladesh under the name of KCA garments? In real sense, value of KCA Garment can not exceed more than $25 grand..thats right 25K!! that is it!! There are hundreds garment factories like KCA is available "SOME CAN BE PURCHASE: for as low as $5K.
I can give you a list of factory that are available for sale by the finance companies at 10 cents to a dollar term. You will than find out that some of them are far better factory than KCA garments in terms of machinery.
Many closed out garment factories owes money to local bank and they are working as sub-contractor on a piece by piece basis known as CM basis. 80% of them are'nt making more than 5% in profits. Because, this is the nature of this business.
Those companies making money in this trade in Bangladesh are a select group. Who got into this business during early 1980's and now has totally integrated plant with investment of over $200 millions and thousands of employees and they deal directly with companies like WAL-MART, FEDERATED STORES, MACY, JC PENNY, OXFORD INDUSTRIES, SEARS and almost all of them have their own buying houses in bangladesh with full staff.
Remember, I am not saying that there is no opportunity of profits in Textile business in Bangladesh. But what I am saying is Veltex does not have the the kind of operation in Bangladesh, which they claim they have. Thats all.
Why should one invest $200 million cash in an industry that "MAY" or "MAY" return a maximum of 5% profits? When same investment in India, Pakistan and China can return 15% profits? Because, Bangladesh does not (big) have necessary ingrediants to make er a textile company is because because country is not a producers of (1) cotton or any fiber, No dyes manufacturing, no pigment manfacturers, No textile chemical manufacturers, no textile machinery manufacturers, no parts manufacturers and most importantly not enough skill manpower to support textile industry there.
What Bangladesh is "a simple CUT & SEW country. where 80% of the yarns and fabrics are imported from India, China, Pakistan, Taiwan and Thailand.
The reason Bangladesh did so great in garment operation (only cut & Sew) is because up until January 2005 there were quota imposed upon bigger textile giants like China, India and Pakistan to give opportunity to LLD countries like Bangladesh to create jobs among poors and could export to earn foreign exchange to stabilize balance of payment.
However, that opportunity is gone as quota (under MFA regime)is now eliminated and those with strong textile industry base would excell in this trade and that is the fact.
I shall write more detail soon..
thanks again
MM
AI
