C&A Textiles begins trial production after long closure

C&A Textiles, a listed company, has returned to production after a five-year hiatus.

The company's dyeing unit started experimental production on Saturday. Full production will start after the trial run. The dyeing unit will produce 25 tonnes of cloth daily. 

However, the garment unit of the company is not ready yet.

The company had earlier cleared its longstanding dues thanks to Alif Group, which came forward to save the textile mill by investing Tk50 crore as a share money deposit.

After the acquisition in 2021 by Alif Group, the company had said it would return to production in January this year. But its authorities could not keep their word because of some complexities and the lack of necessary machinery.

Professor Shibli Rubayat-Ul-Islam, chairman (senior secretary) of the Bangladesh Securities and Exchange Commission (BSEC) – the regulatory body of the capital market, inaugurated the experimental production of C&A Textiles.

The textile company was listed on the capital market in 2015 and raised Tk45 crore from investors through initial public offerings (IPO).

However, its production was halted in 2017 due to loan fraud, less than a year after it was listed in the capital market.

The new owner, Alif Group, is now expanding the factory to increase its production capacity.

At the opening ceremony of the experimental production, the BSEC chairman said, "New employment will be created through the operation of the factory. The defaulted loans will also be regularly cleared. The lenders will be saved. The shareholders will also survive."

"The growth of the garment sector is very high. Capacity building is essential here. Exports will be positively affected by resuming production," he said.

In response to a question, the BSEC chairman said, "Not a single company was closed after we took over. Earlier there was no investigation department in BSEC. We have opened one and measures have been taken to file criminal cases. A case has already been filed."

"Sixty-five companies were sent to the over-the-counter (OTC) market in one day. Seeing the assets of those companies being destroyed, we are working to bring them back to production. Already some companies have started production. If 50-60 OTC companies start production, about 20-30,000 people will be newly employed," Shibli Rubayat said.

Azimul Islam, managing director (MD) of Alif Group, said, "We planned to invest Tk50 crore. Now it seems that more is needed. We are trying to start full production as soon as possible."

C&A Textiles was incorporated in 2001 and started commercial operations in 2003.

On 29 July 2020, BSEC found that C&A Textiles' Managing Director Rukshana Morshed, Director Sharmin Akther Lovely, and Bangladesh Shoes Industries Limited had together sold around 1.22 crore shares of the company without prior declaration, taking around Tk12 crore from these sales.

As a penalty for violating several rules, the regulator later fined them Tk19 crore and banned them from assuming the roles of directors at any other listed company.