In a move aimed at recovering unpaid loans, Sonali Bank has reportedly announced the auction of assets belonging to Alltex Industries, a listed textile producer in Bangladesh. As of 31st March 2022, Alltex Industries owed the state-run bank approximately Taka 380.77 crore.
The auction, which includes the sale of 14.7 acres of land, manufacturing facilities, offices, raw materials, and spare parts that were mortgaged for the loan, invites interested parties to submit their bids by 2nd January.
Despite the auction announcement, Alltex Industries’ share price remained stable at Taka 10 per unit. The company has been listed on the stock market since 1996 and has provided cash dividends only twice, with rates of four percent and one percent in separate years.
According to the company’s financial statements for the fiscal year 2023-24, Alltex reported a net loss of Taka 8 lakh and a retained earnings deficit of Taka 113 crore as of 31st June. The auditor’s report raised concerns, indicating discrepancies in the loan balance; the company’s books showed a Taka 261 crore liability, while Sonali Bank’s records indicated Taka 228 crore owed.
Notably, Sonali Bank refrained from charging interest on the loans from 1st July 2023, to 30th June 2024, and the company did not make provisions for interest during this period. In 2017, the bank waived Taka 129 crore in interest on loans exceeding Taka 360 crore owed by Alltex Group, owned by former Awami League lawmaker Afsar Uddin Ahmad. However, despite this waiver, the company failed to repay its loans, prompting the bank to initiate asset liquidation.
Md Ziaul Huque, the company secretary of Alltex Industries, stated that negotiations with the bank are ongoing and mentioned that the company repaid Taka 1 crore last month. He noted that the loan was taken many years ago, and the total amount has increased significantly due to accrued interest. Huque also highlighted challenges faced by the company, including inadequate gas supply to factories and a difficult business environment exacerbated by the Covid-19 pandemic, the Russia-Ukraine war, and political instability.
An anonymous mid-level official from Sonali Bank remarked that banks typically avoid selling mortgaged assets unless they believe there is little chance of loan recovery. The official emphasised that the bank is focused on recovering its defaulted loans.
