Tough to recover, so go for waiver

Sonali Bank has decided to waive interest of Tk 129 crore on more than Tk 360 crore loan of Alltex Group owned by former lawmaker and Awami League leader Afsar Uddin Ahmad.

The board of the state-run lender, which is struggling to reduce its nearly 30 percent bad loans, made the decision in favour of one of the bank’s top five defaulters on “special consideration”, say Sonali Bank officials.

Seeking anonymity, one of the bank’s directors told The Daily Star on Friday that the bank decided to waive the interest, as it would be tough to recover the defaulted loans through a legal battle. The bank may have to wait 15 to 20 years to get back the money, the director pointed out.

“The Alltex Group has to pay Sonali Bank more than Tk 75 crore before it can avail itself of the facility of interest waiver and loan rescheduling.”

According to the bank documents, the defaulted loans of the Group’s three companies — Alltex Industries, Alltex Fabrics and Alltex Spinning — stood at Tk 360.65 crore till August.

Of the three, Alltex Industries and Alltex Fabrics were earlier listed by the commerce ministry as sick industry for bad performance.

On August 2, the Sonali Bank board approved the Alltex Group’s proposal for waiving interest of its three sister concerns and rescheduling the loan of Alltex Industries. The board then sent the documents to Bangladesh Bank for approval.

The central bank in September approved the proposal for waiving interest and rescheduling the loan of Alltex Industries, and on Thursday also gave the nod to another proposal for waiving interest on the loan of Alltex Fabrics.

Besides, the BB asked Sonali Bank to take steps in line with the existing rules and regulations in case of Alltex Spinning, as the firm is not listed as a sick organisation.

Talking to this correspondent, a number of BB officials said the decision to waive such a big amount of money would encourage other big defaulters to find ways to have their unpaid interest waived.

Contacted on Monday, Sonali Bank Managing Director Obayed Ullah Al Masud declined to comment on the matter.

According to Sonali Bank documents, the state-run bank will waive interest of Tk 72.09 crore on the defaulted Tk 236.74 crore loan of Alltex Industries, and reschedule Tk 164.64 crore on condition that the company repays the money in three years.

The company will also enjoy a six-month grace period and pay 10 percent interest, which is lower than the existing rate between 10.50 percent and 13 percent set by the bank for long-term loans.

The Sonali Bank board also decided to give Alltex Fabrics interest waiver of Tk 20.81 crore after the firm pays dues of Tk 27.80 crore.

Besides, Alltex Spinning will get an interest waiver of Tk 36.49 crore after paying dues of Tk 38.79 crore, show the documents.

Alltex Spinning and Alltex Fabrics will have to clear their dues within the next three months. And the two companies will close their loan accounts with the bank once they do so.

In a letter to the BB in late August, the Sonali Bank mentioned that its board rescheduled the defaulted loan of Alltex Industries in November 2015, offering the company interest waiver of Tk 72.09 crore.

But the company failed to pay the instalments. Three of its cheques were dishonoured in a row, prompting Sonali Bank to file a case against the company under the Negotiable Instruments Act 1981, it said.

The bank will withdraw the case after the Group repays the loans, read the letter.

Sonali Bank documents show that Alltex Industries mortgaged 11.69 acres of land with the bank. Of the property, 1.05 acre would be disposed by the bank so that the Group can sell it along with Alltex Spinning to pay the dues.

Imtiaz Uddin Ahmad Asif, managing director of Alltex Group, told this correspondent on Tuesday that Alltex Industries was listed on the stock exchange while Alltex Spinning is “a family asset”.

“We have failed to run Alltex Spinning properly. We are going to sell the company to clear the liabilities to the bank. We will also sell some land of Alltex Fabrics,” said Asif, son of Afsar Uddin.

The group would do whatever necessary in line with the BB decision, he added.

This correspondent phoned Alltex Group Chairman Afsar Uddin, also member of Chittagong District (South) AL Executive Committee, several times on Thursday, and also sent a message on his mobile phone, but didn’t get any response.

Source: The Daily Star