Peninsula Steel directors ordered to repay Tk193cr loan
Judge Mujahidur Rahman passed the order in a 2020 case filed by the One Bank Ltd’s branch in the port city’s Agrabad area
The Chattogram Money Loan Court on Sunday ordered the owner of Peninsula Steel to pay back within a month nearly Tk193 crore it owes One Bank Ltd.
Judge Mujahidur Rahman passed the order in a 2020 case filed by the One Bank Ltd's branch in the port city's Agrabad area, said the court's Bench Assistant Rezaul Karim.
Defendants in the case are the steel re-rolling company's owner and Managing Director Zafar Alam, his wife and company's Chairman Rasheda Zafar as well as three directors Zafar's brother Abu Alam, his sister Fatema Reshmila Alam and son Zunayed Alam.
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Originally a ship-breaking entrepreneur, Zafar's troubles started in 2014, when he took bank loans for expanding his steel re-rolling business under the false claim of ship-breaking investment. The drive to modernise re-rolling activities at Peninsula Steel proved futile as he could not generate enough earnings to repay the nearly Tk300 crore loans taken from four different banks, including One Bank.
As per a hearing session on 28 August, Zafar and his co-defendants expressed their wish to repay the Tk192.85 crore in One Bank loans over a long time under the central bank's special interest-relief facilities. Accepting their plea, the court ordered them to pay Tk2 crore in down-payment within a month. However, neither did they pay the sum, nor sought a deadline extension, prompting the court to pass a unilateral order on Sunday.
As per One Bank, Zafar took the huge loan in 2014 for importing older ships but broke the terms of the loan by investing the sum in his re-rolling business. Initially, he cooperated well with the bank, paying installments regularly but over the last couple of years has not paid up.
As a result, the bank filed a case on 28 October 2020 against the top officials of Peninsula Steel. The company also owes Eastern Bank's Agrabad branch Tk58 crore, Bangladesh Commerce Bank's Agrabad branch Tk10 crore, and Dhaka Bank's Khatunganj branch Tk36 crore. A separate case is ongoing over the loan taken from Eastern Bank.
For over four years, steel re-rolling activities at Peninsula Steel had been at a standstill. After years of closure, the factory floor has been rented out to a Dhaka-based party. The company's shipbreaking activities stopped even before that.
