Bank Asia puts Deshbandhu Sugar’s collateral on auction

In its bid to realise Tk 112 crore loans from Deshbandhu Sugar Mills Ltd, Bank Asia PLC has decided to auction more than 48 decimals of land and properties kept by the refiner as collateral.

In November 2021 and March-April 2022, Deshbandhu Sugar opened letters of credit (LCs) to import raw sugar through Bank Asia.

The company was supposed to deposit the money by selling refined sugar, officials said.

But the sugar refiner did not make payments against the LCs within due time, said Sohail RK Hussain, managing director of Bank Asia.

"As a result, the LC amount turned into a forced loan. We negotiated with the borrower several times, but we did not get the money back."

Officials said Deshbandhu filed a writ petition with the High Court in August 2023 and secured a stay order, meaning the company could not be declared a defaulter.

"We received the final court verdict regarding the writ in our favour in July this year and therefore vacated the stay. Finally, we have put the collateral for auction to realise the loan," Hussain said.

He said the owner of Deshbandhu has indicated he wants to sit with Bank Asia to negotiate.

"We will negotiate with the customer to recover our dues but our legal process will run in parallel," Hussain said.

"It is a serious violation if the sales proceeds of goods financed by a bank are not deposited to the bank and are used to adjust the customers' liabilities."

In its auction notice published in Bangla daily Prothom Alo in line with the Money Loan Court Act 2003, Bank Asia said its loans to Deshbandhu stood at Tk 112.08 crore as of August 31 this year.

The lender invited bids from interested buyers for properties mortgaged by the company in the capital's Uttarkhan, Uttara Residential Model Town and Bashundhara.

Of the properties, Bank Asia has sought bids from buyers to sell 23.58 decimals of land in Uttarkhan together with the buildings or structures on the land.

Similarly, 16.50 decimals or 10 katha of land at Joar Sahara in Bashundhara along with all structures or buildings constructed on it were also put up for auction.

Another 8.25 decimals of land under the Uttara Residential Model Town and all structures and buildings will be auctioned.

The private bank invited prospective bidders to submit bids by October 10.

Hussain added: "Nonperforming loans, especially when the failure may or may not be the result of a business default, is a very serious incident and Bank Asia will litigate such cases to the full extent of the law."

He said an adequate number of judges experienced in banking litigation is essential if we wish to curb the culture of non-performing loans and the impunity that influential customers enjoyed in the past.

"Hopefully, in the future, hearings can be held faster," he added.

When contacted, Deshbandhu Group Chairman Golam Mostafa said this is a sub-judicial matter. "I don't want to comment."