The 14 factories of the Textiles and Apparel Division of Beximco Industrial Park located in Sarab area of Gazipur city have been declared completely closed from February 28. In addition, the authorities have decided to lay off all the workers of the factory as the company is closed.
The government will sell the ownership of 16 companies in the Beximco Group's garment sector. In addition, several companies related to this group will be closed. Only profitable companies, including Beximco Pharmaceuticals, will remain operational. This decision was made at a meeting of an 11-member advisory committee formed at the initiative of the interim government.
Layoff announcement
The announcement was made in a notice signed by the Managing Director of Beximco on Wednesday (February 26). It said that due to the work crisis in 14 factories of Beximco Limited (excluding Yarn Unit-1) located in Gazipur, lay-offs were announced from December 16 last year and February 5 this year as per the Bangladesh Labor Act 2006 (Amended 2018). However, as the situation has not improved, the company is being closed from February 28 and all the workers concerned will be laid off.
According to government data, the number of Beximco Group companies, big and small, known and unknown, is 169. Of these, 32 are in the garment sector, which are in production. It has been decided to sell the ownership of 16 of these 32 companies. Apart from these, the Beximco Group companies that are running at a loss will be closed after paying the salaries and allowances of the officers and employees of the three months.
The notice also states that all dues to laid-off workers will be paid in accordance with the law and this process will begin on March 9.
Although Beximco Group has dealings with various banks, Janata Bank was the main source of borrowing for the company. Currently, the company has a loan of Tk 23,557 crore with Janata Bank, most of which has defaulted. As this loan exceeds the limit of a single borrower, Beximco is also closed from taking new loans.
The Banking Companies Act stipulates that a bank should not lend more than 25 percent of its capital to any single customer. But the loans exceeded this limit by an alarming 410 percent. Despite this violation of the law, the central bank, as the regulatory authority, has not taken any action at the time, it is alleged.
In a writ hearing in the High Court, Bangladesh Bank said that the total liabilities of Beximco's 78 entities in 16 banks and 7 financial institutions are Tk 50,000 crore, of which about Tk 32,000 crore are currently in default. In this situation, the company was not able to pay salaries regularly, which led to discontent among the workers.
A letter sent to the Finance Ministry mentioned that Janata Bank will receive Tk 23,407 crore from Beximco, of which Tk 19,507 crore is classified as bad debt (defaulter). The remaining Tk 3,394 crore is overdue. Which will turn into bad debt in the next few months.
On December 15, a meeting of the Ministry of Labor and Employment reviewed the business situation of Beximco's industrial establishments. According to the decision of the meeting, it was decided to close 16 factories of the company. The government said that it is not possible to operate the factories due to a crisis in orders and inability to repay bank loans.
Beximco spent Tk 600 million on monthly salaries for workers and Tk 150 million on salaries for officials. Although there has been dissatisfaction among the workers due to the failure to pay their salaries regularly, there has been no major movement so far.
Gazipur Industrial Area Police Superintendent AKM Zahirul Islam said, "There is no worker dissatisfaction in the factory area. A peaceful environment is maintained. Additional police have been deployed there to ensure that no untoward incident occurs."
The crisis at Beximco Group, one of Bangladesh's largest industrial conglomerates, is being seen as a major setback for the country's ready-made garment sector. The government and business community are now looking at how to handle the situation and ensure that workers are paid their fair dues.
