Hamid Fabrics owners summoned over Tk55cr loan default
The Money Loan Court (Artha Rin Adalat) summoned the owners of Hamid Fabrics Ltd, a publicly listed company on the capital market, over their failure to repay outstanding loans amounting to Tk55.55 crore to Bank Asia.
The lender had earlier filed a case with the Artha Rin Adalat, naming seven defendants including the company itself, its managing director, and several directors.
In addition, the bank had also announced plans to auction off the company's assets to recover the dues.
The court issued summons notice to the defendants through newspaper, and instructed the defendant to personally appear or be represented by an appointed lawyer and submit a written statement to the Second Money Loan Court in Dhaka during court hours by 17 June.
Keep updated, follow The Business Standard's Google news channel
However, the business standard could not confirm whether the defendants appeared before the court or submitted any written statement.
When contacted, an official of Hamid Fabrics, seeking anonymity, said they were not aware of the court summons.
He admitted that the company has loans with the bank and said it has been trying to repay the outstanding dues.
The company's managing director, Abdullah Al Mahmud, did not respond to phone calls.
Shaiful Alam, an authorised officer with the case of Bank Asia, told The Business Standard, "The court has issued summons notices to the company over a case filed earlier to recover the loans."
In the summons notice published in a newspaper, the defendants are named as Hamid Fabrics Ltd; Abdullah Al Mahmud, Managing Director; AHM Mozammel Hoque, Director; Salina Mahmud, Director; Nusrat Mahmud, Director; Nabila Mahmud; and Farhana Danish.
The notice states that if the defendants do not personally appear, or be represented by an appointed lawyer, and submit a written statement to the Second Money Loan Court, Dhaka, during court hours by 17 June, the case would be settled against them under the provisions of the Money Loan Court Act, 2003," reads the notice.
In December last year, Bank Asia announced an auction to sell the assets of Hamid Fabrics, a subsidiary of Mahin Group, in a bid to recover an outstanding loan.
The notice, published in daily newspapers at that time, sought quotations from interested buyers to auction 296.50 decimals of land, along with the factory building and machinery, located in Narsingdi, all owned by Hamid Fabrics.
At that time, Abdullah Al Mahmud, managing director of Hamid Fabrics, told TBS, "This is very unfortunate. We are in talks with the bank to resolve the matter and hope it will be resolved soon."
Hamid Fabrics' factory has three production units. The woven fabric unit has an installed capacity to produce 32.40 million yards annually, while the weaving units have an annual capacity of 9.88 million yards, and the dyeing unit has about 1.37 million kg yarn capacity.
Heavy losses
Hamid Fabrics, which got listed on the stock exchanges in 2014, incurred substantial losses of Tk36.97 crore, with a per-share loss of Tk4.06 in the 2023–24 fiscal year.
Due to these losses, the company did not recommend any dividend for its shareholders for that year.
It also failed to hold its Annual General Meeting (AGM) for FY24, which led to its downgrade to the Z category.
The loss-making has also been continuing for the 2024-25 fiscal year as it incurred a loss of Tk26 crore with per share loss of Tk2.86 in the first half during the July to December period.
The textile firm is yet to publish the nine months financials of FY25.
Hamid Fabrics raised Tk105 crore through issuing shares at Tk35 each including a premium of Tk25.
It spent Tk30 crore for repaying loans from the public fund, while Tk72 crore for business expansion.
Hamid Fabrics' shares closed at Tk7.8 each today at the Dhaka Stock Exchange.
