Towel exporter eats up Tk 21cr incentive
Bismillah Towels Group, a towel manufacturer and exporter, has fooled the government and pocketed nearly Tk 21 crore of taxpayers' money in the name of incentives, revealed a Bangladesh Bank (BB) inspection.
The group overpriced its exports to enjoy 10 percent cash incentives from the government.
To get the benefit, Managing Director and owner of the group Khaja Soleman Anowar Chowdhury had opened two companies, Banglus Middle East in Dubai and Banglus Singapore, and showed his export destinations there at a much higher price.
Although he exported the goods directly to Banglus Middle East and Banglus Singapore, Soleman told The Daily Star recently that these two companies were Bismillah's strategic partners that marketed towels in Middle East countries on the group's behalf.
"They [Banglus Middle East and Banglus Singapore] are not our buyers. They contact with buyers," he said.
However, business information report by D&B, a global rating agency, showed that Soleman is a shareholder and chief executive of the companies.
After the Hall-Mark Group scam in May last year, BTG's swindling appeared to be a hot topic for discussion in the banking sector.
The inspection by the central bank has found that three companies of BTG allegedly took away around Tk 1,100 crore from five banks between 2010 and 2012. The group pocketed the money by showing false exports, taking the advantage of inland bill purchase as did the controversial Hall-Mark Group, and overpricing the exports to get cash incentives.
BTG committed the irregularities through its three concerns -- Bismillah Towels, Hindul Wali Textile and Alppa Composite Towels.
The central bank report says BTG took Tk 17 crore as incentives from the Prime Bank's Motijheel branch by showing false documents and Tk 3.79 crore from state-owned Janata Bank's Moghbazar branch.
When the BB inspection team found that the group took the incentive benefit on forged documents it ordered the Prime Bank to recover the money. But soon after the order, BTG filed a writ petition with the High Court that stayed the BB order.
To check on the irregularities, Southeast Bank stopped business with BTG in early 2012, whereas Prime Bank continues business with the controversial group.
Despite repeated phone calls and texts, Managing director of Prime Bank Ehsan Khasru and MD of Janata Bank SM Aminur Rahman did not respond to this correspondent.
Bangladesh is an emerging exporter in terry towel items. But industry players have set up a few companies, like BTG, which are damaging the prospects of the sector. Bangladesh generally exports basic towel that costs from $ 5.10 to $ 5.70 per kilogram, but BTG showed its export prices at $ 9.50 to $ 12.50 per kilogram.
Documents show BTG in February last year claimed that it had exported 214,828 kg of towel and the price of the export stood at over $ 23.39 lakh (FOB), which according to usual rates should have been $ 10.74 lakh at best. Consequently, BTG got over Tk 1 crore more incentive than a fair exporter who did not overprice his towels.
BTG started its operations with Hindul Wali Textile in 1988 and now it owns nearly a dozen of companies from that of towel to spinning, composite and logistics.
According to the group's managing director, BTG had exported goods worth Tk 700 crore in 2011 and of nearly Tk 1,000 crore in 2012.