Islami Bank to auction Aramit Cement assets to recover Tk588cr default loans

To recover defaulted loans of Tk588.93 crore (as of 21 July), Islami Bank Bangladesh PLC has moved to auction the mortgaged assets of Aramit Cement PLC, a company in which former land minister Saifuzzaman Chowdhury is a major stakeholder.

The country's largest private bank announced that bids have been invited until 28 September, with prospective buyers being asked to participate in the auction process, according to the auction notice issued by the Chattogram Jubilee Road Branch of the bank on 4 September.

The collateral put up for sale includes 15 acres of land in the Kalurghat Heavy Industrial Area of Chattogram, along with factories and buildings of Aramit Cement, Aramit Power Limited, Aramit Steel Pipes Limited, and Aramit Thai Aluminium Limited, according to the notice.

According to bank documents, the company mortgaged around 6.61 acres of land with the personal guarantees of all directors against loans that began with Tk50 crore in FY22 and rose sharply to Tk423 crore by FY23.

A senior officer of the branch told TBS that Islami Bank has been lending to the loss-making firm at the persuasion of the former land minister Saifuzzaman. But the company has never cleared loan instalments in due time. So, the bank moves to recover the loan, complying with the related laws.

Former land minister Saifuzzaman Chowdhury Javed is a sponsor shareholder of Aramit Cement, holding 14.97% of its shares. His wife, Rukhmila Jaman, previously served as the company's managing director.

Other sponsor shareholders include Aramit Limited with a 19.29% stake, Bangladesh Development Bank with 6.43%, and the Investment Corporation of Bangladesh with 5.23%. These institutions have representation on the company's board through nominated directors.

This is not the first legal action faced by Aramit Cement over unpaid loans. 

In January this year, the Chattogram Money Loan Court froze the company's bank account following a case filed by Bank Asia over Tk14.63 crore in dues.

Judge Mujahidur Rahman issued the order after the bank alleged that no property had been mortgaged against the loan and that the company's sponsor, Saifuzzaman and his wife left the country in August last year following the political changeover. The same court also issued restrictions on the transfer of mortgaged properties, including an apartment linked to the firm.

Separately, Social Islami Bank filed a case against Aramit over dishonoured cheques amounting to Tk3.30 crore, issued in August 2024 to settle part of its outstanding dues. The cheques, signed with the consent of directors and officers, bounced due to insufficient funds in the company's account.

Aramit Cement's troubles deepened when a Dhaka Stock Exchange (DSE) inspection team found its factory out of operation on 22 July 2025.

Nearly a year after the regime change, and in the absence of its owners, the company suspended production indefinitely. 

A senior company official, requesting anonymity, told TBS that a lack of raw materials, cash shortages, and complications in opening letters of credit forced the closure.

"Banks have been unwilling to open LCs due to our failure to repay loans, while several lenders have already served legal notices to owners and directors," the official said.

The cement maker's liabilities are estimated at around Tk800 crore, a large portion of which is accumulated interest.

Financial statements show the company's retained losses reached Tk234 crore by the end of March 2025.

Aramit Cement has posted significant losses for three consecutive fiscal years since FY22, including Tk20.19 crore in the first nine months of FY25 alone. The last time it reported a profit was FY21, when it posted Tk2 crore.

Established by the late Awami League leader Akhtaruzzaman Chowdhury, father of Saifuzzaman, Aramit Cement was listed on the stock exchanges in 1998. 

Once considered a promising player in the sector, the company has since struggled with debt and operational setbacks. Its last dividend was a 5% cash payout for FY22, and it now trades under the Z category for failing to declare dividends in recent years.

On Tuesday, Aramit Cement's shares fell 6.62% to Tk12.70 each on the Dhaka Stock Exchange, reflecting growing investor concern over its financial stability and ongoing disputes with multiple lenders.