HC stays Bepza's land lease termination for Ring Shine

The High Court has passed a three-month stay order on the Bangladesh Export Processing Zones Authority's (Bepza) decision to terminate the land lease agreement for six plots allocated to Ring Shine Textiles Limited. 

The order was issued last week by the High Court bench, comprising Justice Farah Mahbub and Justice Debasish Roy Chowdhury.

On 20 February, Bepza terminated the lease agreement due to Ring Shine's prolonged failure to pay its dues. The order stipulated that the company must vacate the plots within seven days, or Bepza would take possession. As of 31 January 2025, Ring Shine owed Bepza $12.8 million. 

In response, the company filed a writ petition challenging the decision.

On Thursday, Ring Shine's share price stood at Tk4.10 on the Dhaka Stock Exchange.

The company explained that it had been unable to settle its dues because the securities regulator had not released the remaining funds from its initial public offering (IPO), despite multiple requests. 

Currently, Ring Shine holds 50 plots under land lease agreements with Bepza.

According to Bepza, Ring Shine's failure to clear its dues has been ongoing for an extended period despite repeated requests for payment and multiple opportunities to resolve the outstanding balance. 

Moreover, despite making several commitments and submitting various payment plans, the company repeatedly failed to meet its obligations and neglected to pay its regular dues.

Aniruddho Piaal, managing director of Ring Shine, said the company is working to fully resume operations, having increased its production capacity to 50%, up from below 10%. 

He mentioned that the company had applied to the securities regulator for the release of IPO funds, requesting $1 million to clear its dues with Bepza. 

However, these funds have yet to be released.

Piaal added that BEPZA had already suspended the company's import and export permissions due to non-payment, ultimately leading to the termination of the lease for five of the company's plots. 

"Without the release of IPO funds, it would be impossible for the company to pay Bepza," he said.

Despite its financial difficulties, Ring Shine posted strong revenue growth in the October–December quarter of the current fiscal year. The company reported a revenue of Tk67.33 crore, marking a 161.27% increase from Tk25.77 crore in the previous year.

However, the company faced significant losses due to various factors, including high raw material costs, the ongoing burden of accumulated losses, and rising financial overheads. 

For the quarter, Ring Shine reported a loss of Tk35.32 crore, compared to a loss of Tk27.72 crore in the same period last year. The per-share loss stood at Tk0.71, up from Tk0.55 in the previous year, and the net asset value per share was negative Tk9.50.

###