Janata Bank to put Pacific Denims on auction
Loans were mortgaged against the company’s nine decimals of land in Badda
Janata Bank will recover Tk14.42 crore by auctioning the assets of the textile company Pacific Denims Limited.
On Tuesday, the state-owned lender published an auction notice in a national daily to sell the company's assets.
An official at the bank's Motijheel branch said on condition of anonymity that despite repeated reminders, the company has not repaid the loan.
So a case was filed against the company. Now according to the judgement of the case, the debt will be recovered by selling the assets, he added.
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He also said the company has nine decimals of land in the capital's Badda. Loans were mortgaged against this asset. It will be sold now.
According to its financial report, Pacific Denims has a loan of Tk42.57 crore with IDLC Finance and Agrani Bank. But nothing has been said about the loan it has with Janata Bank.
Company Secretary Md Sorhab Ali told The Business Standard, "We have no debt with Janata Bank. But I do not understand how the issue of this loan came about. It seems that the loan was made to one of our affiliates."
In 2021, IDLC Finance, a non-bank financial institution, had earlier filed a case against the company for debt recovery. The company then said it could not repay the loan due to a business slowdown owing to the Covid-19 pandemic.
The company said that the issue with IDLC has now been resolved.
Despite Janata Bank's loan default, the revenue of Pacific Denims, a manufacturer of denim fabrics for export, has been Tk121.88 crore in the first nine months of the fiscal 2021-22. And during this period, the profit was Tk5.84 crore.
The company, which got listed on the stock market in 2017, has not incurred any loss despite a bank loan controversy. In the fiscal 2018-19, its maximum profit stood at Tk21.40 crore.
And after listing, the company has paid stock dividends to shareholders every year. Once it paid only 1% cash dividend.
The company raised Tk75 crore through an initial public offering (IPO) for business expansion and repayment of bank loans. But its directors were alleged to have embezzled Tk20.98 crore from the IPO fund.
The Bangladesh Securities and Exchange Commission (BSEC), found evidence of this allegation. Therefore, each director of the company was fined Tk3 lakh. And brought back the embezzled money.
The company's share price has been stuck at the floor price on the Dhaka Stock Exchange since 18 September. On Tuesday, 3,131 shares were traded at the floor price of Tk11.50.
