Writ puts off auction of Crescent property
Janata Bank could not materialise its efforts to recover Tk 3,443 crore from Crescent Group by way of selling properties of the borrower through auctions after a writ filed by the company postponed the public sale.
Last month, the state-run lender advertised the auction notice through newspapers calling for bids by October 31 to purchase the mortgaged property of five firms of Crescent Group as the client has become a defaulter.
Crescent filed the writ petition against the auction a day before the last bid submission day on Wednesday and got a stay order. However, no bidder participated in the bidding.
“We got a lawyer's certificate over the stay order in the last day of the bidding,” a senior executive of the bank told The Daily Star on condition of anonymity.
The bank will file a petition before the court for dismissing the writ, he added.
Five firms of the group that owe money to the bank are: Crescent Leather Products, Crescent Tanneries, Lexco Ltd, Rupali Composite Leatherwear and Remax Footwear.
Two brothers -- MA Kader and Abdul Aziz -- are the main beneficiaries of Crescent.
Aziz, owner of film production company Jaaz Multimedia, is the chairman of Remax Footwear while Kader is the owner of the four other companies.
Contacted, Kader said: “We will get rid of loans if Janata Bank gets the money by selling off the property.”
In a recent probe into Janata Bank, the central bank found that Crescent Group skimmed off at least Tk 765 crore in the name of exports from the state-run Janata and the BB from January last year to February this year.
The central bank suspected that the sum was laundered. Even the group could not repatriate the proceeds despite making commitment to the bank of bringing back $500,000, or about Tk 4 crore, every week.
In a proposal sent last week to the bank, the client made three demands, including allowing exports at advance payment and import at 100 percent margin and rescheduling of the defaulted account by making down-payment.
Currently, all transactions of the client with Janata Bank have remained suspended.
The proposal was placed at the board meeting this week where the board gave opinion in the group's favour. The final decision will be taken in the next board meeting scheduled next week, said a senior executive of the bank.
The bank will not accept the proposal because the client had made the commitment to repatriate the export proceeds, but failed to keep words every time, he said.
Crescent Group proposed it will make advance payment before exports on condition that it should be allowed to withdraw 50 percent of the proceeds. The rest will be adjusted with the loans.
It also requested the bank to allow it to open fresh letters of credit at 100 percent margin so that it can import chemicals to process rawhides at its factory.
LC at a 100 percent margin means the client will open the LC after making full payment. As a result, new loans will not be created.
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