State-run Janata Bank has published an auction notice for Apollo Apparels, a company located in the Beximco Industrial Park, as part of its effort to recover defaulted loans of Tk 816 crore.
The announcement came amid ongoing discussions over a proposed $20 million investment to reopen several Beximco Group factories.
According to the auction notice, Janata Bank's local office had disbursed Tk 251 crore to Apollo Apparels for back-to-back letters of credit (LCs) with EDF facilities against export LCs and contracts, as well as for packing credit and other export operations.
However, the borrower failed to repay the loans, leaving outstanding liabilities, including interest, at Tk 816 crore as of October 31 this year. The loans have now been classified as defaulted.
To recover the funds, the bank recently published the auction notice. It said that immovable and movable third-party properties listed in the schedule, mortgaged to the bank, along with the stock of goods in the factory held as loan security, will be sold.
The auction is scheduled for December 7 at Janata Bank office at Motijheel in Dhaka.
Contacted, Khalid Shahrior, head of HR and compliance for Beximco's textile and garment division, said the company was surprised by the notice.
"We are talking about new investments and trying to move everything forward positively, yet the bank issued this notice at such a time," he said. He added that the matter is under review by their legal team.
Beximco's textile division closed its factories last year due to financial problems. Recently, it revealed reopening plans with support from Japan-Bangladesh joint ventures Revival Group Co Ltd and Revival Projects Ltd.
The initiative is also supported by US-based financing partner Ecomilli, founded by non-resident Bangladeshi professionals, according to a joint statement by Beximco and Revival.
Under the plan, Revival and Ecomilli will invest $20 million through back-to-back letters of credit (LCs). If factory performance and global demand improve, the investment could rise to $100 million.
The production is expected to restart by December this year.
The Daily Star attempted to contact Md Mazibur Rahman, managing director of Janata Bank, by phone but received no response.
At the end of last year, Janata Bank's total exposure to the Beximco Group stood at Tk 22,078 crore, of which Tk 21,920 crore had defaulted, according to the bank's annual report.
A Bangladesh Bank report showed that 25.51 percent of Janata's total loans were extended to 30 Beximco companies, and 26 of these breached the single borrower exposure limit.
Beximco Group, considered as one of the country's largest conglomerates, was led by Salman F Rahman, the former private industry and investment affairs adviser to Sheikh Hasina.
Salman, vice-chairman of the group, has been in jail since August last year. He served as a member of parliament for Dhaka-1 from 2018 until the dissolution of the 12th parliament.
According to several past and present Janata officials, Salman obtained large volumes of loans with support from the bank's board and senior central bank officials, bypassing banking rules and regulations. These loans are now among the bank's defaulted accounts.
At the end of last year, Janata Bank's total disbursed loans stood at Tk 1,00,794 crore, with Tk 68,066 crore classified as defaulted.