BAT Bangladesh has to vacate Mohakhali HQ as SC rejects lease appeal

British American Tobacco (BAT) Bangladesh, a leading multinational cigarette manufacturer, must vacate its head office and factory premises in the capital's Mohakhali DOHS after the Supreme Court rejected its appeal to extend the land lease agreement with the Dhaka Cantonment Board.

The Appellate Division, led by Chief Justice Syed Refaat Ahmed, today (29 May) dismissed BAT Bangladesh's appeal, which challenged a previous High Court order regarding the lease dispute.

Earlier, on 12 December last year, the High Court also dismissed the company's writ petition contesting the cantonment board's decision not to renew the lease agreement for the Mohakhali DOHS land.  

Regarding the Supreme Court's decision, a BAT spokesperson said, "We acknowledge and respect the decision by the Honorable Supreme Court of Bangladesh to dismiss our appeal regarding the continuation of BAT Bangladesh's lease for its Mohakhali DOHS site. However, given the scale of our business, significant level of business disruption as well as the consequent potential government revenue impact seems inevitable.

"BAT Bangladesh had a 90-years lease from the Defense Ministry since 1964, which was extendable every 30 years. As a responsible company, we have always been committed to operate in compliance with all local laws and regulations, and will continue to do so in the future.

"In the light of the latest decision, we remain committed to acting in the best interests of all stakeholders as we assess the next steps. In order to minimise the business disruption impact, maintain the wellbeing of our people employed at the Dhaka site, and ensure continued economic contribution to the nation, we are discussing with the relevant stakeholders to ensure a sustainable business continuation. We remain confident that, with the support of our stakeholders, we will be able to carry out this transition in a responsible manner."

According to BAT Bangladesh's 2024 annual report, the company has been leasing the factory premises from the Dhaka Cantonment Board since 1964. Each lease term spans 30 years, with the option to renew for a total duration of up to 90 years.

The company had applied to renew the lease for the remaining 30 years, but after the board declined to extend it, BAT Bangladesh initiated legal proceedings to enforce what it claimed were contractual rights.

Environmental activists have staged protests and formed human chains on multiple occasions, demanding the relocation of BAT Bangladesh's factory from Mohakhali, citing pollution concerns.

BAT Bangladesh has three factories located at Mohakhali, Savar and Manikganj, and a green leaf trash plant in Kushtia.

The first factory in Bangladesh (then East Pakistan) was set up in 1949 at Fauzdarhat in Chattogram, and in 1965, the second factory of Pakistan Tobacco Company was set up at Mohakhali.

After Bangladesh's independence, the company became Bangladesh Tobacco Company Limited, and in 1998, the company changed its name and identity to British American Tobacco Bangladesh, aligning the corporate identity with other operating companies in the BAT Group.

It got listed on the bourse in 1977. At the end of trading today, the company's share price closed at Tk268, which was 5.97% higher than the previous session.

BAT Bangladesh recorded Tk9,597 crore in gross revenue during the first quarter of 2025, despite a sharp decline in cigarette sales.

According to the company's unaudited Q1 financials, its net profit dipped 23% to Tk318 crore, down from Tk413 crore last year. Earnings per share (EPS) fell to Tk5.89.

It paid a 300% cash dividend for the last year, while it earned a gross revenue of Tk43,231 crore and a net profit of Tk1,751 crore.