Beximco defaults on €33m in Germany, Deshbandhu owes Czech bank €4m

Beximco Ltd, owned by Salman F Rahman – former private sector adviser to ousted prime minister Sheikh Hasina – has defaulted on a loan in Germany.

ING Bank's Germany branch has written to Bangladesh Investment Development Authority (Bida) seeking recovery of the €33 million Export Credit Agency term loan given to Beximco.

The matter was discussed at a 21 May meeting of the Scrutiny Committee on Foreign Loan/Supplier's Credit, chaired by Bangladesh Bank Governor Ahsan H Mansur. The committee decided to advise the German lender to proceed with legal action against Beximco if the borrower fails to resume debt servicing.

The official meeting minutes states, "The scrutiny committee decided that Bida will inform the lender that they can proceed for recovery as per the existing legal framework if no debt servicing is proceeded by the borrower."

A senior Bangladesh Bank official confirmed that Beximco took out the €33 million ECA term loan from Germany's ING Bank but has failed to repay the principal or meet security interest obligations. In response, ING Bank sent a letter to Bida, asking what steps the Bangladesh government has taken against Beximco and what outcomes have followed. The letter was presented and discussed at the committee meeting chaired by the BB governor.

According to Bangladesh Bank records, as of September last year, Beximco Group's total outstanding loan stood at nearly Tk50,000 crore, half of which was classified as defaulted at that time. The group's defaulted loans have since increased further.

Meanwhile, the Czech Republic's embassy in Delhi has sent a  to Bida, accusing Deshbandhu Group of non-cooperation after defaulting on a €4.10 million ECA-covered buyer's credit from Ceskoslovenska obchodni banka.

Following discussion of this letter at the scrutiny committee meeting, it was decided that Bida will take necessary measures for effective communication between the borrower and the Export Guarantee and Insurance Corporation (EGAP) of Czech Republic for finding an amicable solution regarding non-compliance by the borrower.

Following the fall of the Hasina government on 5 August last year, Beximco Group Chairman Salman F Rahman was arrested and is currently in prison. Recently, the UK government seized properties registered under the names of his son and nephew. Meanwhile, Deshbandhu Group Chairman Golam Mostafa has reportedly been residing abroad for an extended period.

Fourteen factories of Beximco Limited, a company listed on the stock market, have been permanently shut down since 9 March. The dues of the workers from these factories have been cleared by the government. Beximco Limited has defaulted on loans worth around Tk28,000 crore from the state-owned Janata Bank.

Attempts were made yesterday to contact Beximco Limited's Managing Director Osman Kaiser Chowdhury by phone call and SMS regarding the company's loan default in Germany, but no response was received.

Efforts to reach Deshbandhu Group Chairman Golam Mostafa via WhatsApp call and SMS to discuss the €4 million loan default in the Czech Republic also went unanswered.