Beximco Group faces auction of mortgaged assets over Tk409cr loan default

Infographics: TBS

Exim Bank has announced the auction of mortgaged assets owned by Beximco Group affiliates, as part of its efforts to recover defaulted loans amounting to Tk409 crore. 

The auction notice, published in national dailies on 6 November, marks a new phase in the long-running financial troubles of one of the country's largest conglomerates.

According to the auction notice, the bank will sell a total of 516.50 decimals of mortgaged land located in Gazipur. Bidders have been instructed to submit their offers by 26 November. 

According to the bank, Beximco LPG Unit-1 owes Tk409 crore as of 4 November, borrowed from the corporate branch at Exim Bank's head office.

The guarantors and mortgagors of the loan include several Beximco affiliates – SS Company Limited, OK Company Limited, Astra Company Limited, and Bangladesh Export Import Company Limited (Beximco Ltd), the flagship listed firm of the group. All these entities are among the group's core business arms, spanning sectors from energy and textiles to pharmaceuticals and construction materials.

The move comes under the Money Loan Court Act 2003, which allows banks to sell mortgaged properties before filing a case in court – a right that Exim Bank is now exercising for the first time against Beximco's assets since 5 August 2024.

Officials from Exim Bank said the auction initiative is part of the loan recovery process and does not contradict the Bangladesh Bank's recent announcement dissolving the board of Exim Bank, a move that will merge it with four other banks. 

"This step is strictly a recovery measure under legal provisions and aligns with our fiduciary duty to depositors," a senior bank official told The Business Standard.

Beximco LPG Unit-1 has been operating in Bangladesh's liquefied petroleum gas sector since 2018. It was the first company in the country to introduce composite fiberglass LPG cylinders for household use.

Repeated attempts by this newspaper to reach Osman Kaiser Chowdhury, the managing director of Beximco Ltd, for comments on the matter went unanswered.

The group's vice chairman, Salman F Rahman, remains in jail after his arrest on multiple charges following the fall of the Awami League government in 2024. Once one of the country's most influential businessmen and a key policymaker, Salman now faces mounting legal and financial pressure as authorities move to recover vast sums owed by his companies.

Earlier, in August, the money loan court has ordered six directors of Beximco Limited to repay Tk360 crore to the private sector United Commercial Bank (UCB) within 60 days. 

Government data shows that Janata Bank alone holds Tk23,000 crore in exposure to Beximco Group, while the overall banking sector exposure is estimated to be around Tk35,000 crore. In the aftermath of the company's mounting financial distress, the former government had even extended an interest-free Tk585 crore loan to Beximco to clear the unpaid wages of its employees.

Earlier, in March, the High Court annulled a previous order that had directed the Bangladesh Bank to appoint a receiver to oversee Beximco's 169 companies, allowing the conglomerate to operate under its own management once again. In its observation, the court cited a central bank report that criticised both the Bangladesh Bank and commercial lenders for their failure to recover defaulted and classified loans from Beximco, warning that "the burden would ultimately fall on the public."

In May, the Anti-Corruption Commission (ACC) secured a court order freezing the shares of 94 Beximco Group companies owned by Salman F Rahman and his associates. The Dhaka Metropolitan Senior Special Judge's Court also froze the beneficiary owner (BO) accounts of 79 individuals linked to the Salman family, including his wife Syed Rubaba Rahman, son Ahmed Shayan Fazlur Rahman, brother Ahmed Sohail Fasihur Rahman, and nephew Ahmed Shahriar Hasan.