AB Bank puts Aman Feed’s factory and land on sale for failure to pay loans

AB Bank has put the factory of Aman Feed and its collateral on sale for its failure to pay Tk 268.40 crore in loans and interest within the sanctioned timeframe of July.

“We gave them enough time and talked to them on several occasions, but to no avail. That’s why we have put their factory and lands in Sirajganj and Gazipur on auction,” said AB Bank’s President and Managing Director Tarique Afzal.

The bank estimates that the approximate value of the property, including the factory in Sirajganj and lands in Sirajganj and Gazipur, is more than Tk 70 crore.

Aman Feed, a concern of Aman Group, got the revolving loans to buy capital machinery and raw materials in 2006 when it began commercial production to make poultry, fish, shrimp and cattle feed to cater to the burgeoning poultry, aquaculture and dairy industries, officials said.

Bangladesh needs nearly 65 lakh tonnes of feed per year and the poultry industry is the main consumer.

Aman also has business in poultry breeding and hatchery.

AB Bank said it filed cases against Aman Feed under negotiable instrument law earlier and arrest warrants were also issued against the officials of the company.

The lender had granted Aman Feed time to pay back the loans in a bid to reduce its non-performing loans and improve overall financial health.

“But, as the company did not pay back the loans, we have put all its enforceable mortgages on auction,” Afzal said.

The bank published notices for selling the property shown as mortgage by Aman Feed’s Managing Director Md Shofiqul Islam.

Bangladesh Securities and Exchange Commission had also fined all the directors of Aman Feed except the independent director Tk 25 lakh each in January for violation of securities rules.

Aman Feed got listed with the stock exchanges in 2015 after floating two crore shares to the public and raised Tk 72 crore to use the fund for expansion, loan repayments and as working capital.

The company, however, in its IPO utilisation report submitted to the stock market regulator said all the loans as per the proposal in the initial public offering (IPO) were repaid to AB Bank.

The bank in October last year issued a legal notice to Aman Feed saying the company has failed to pay the monthly instalments of loans.

A special audit report of MBS and J Partners Chartered Accountants said the company had not used the money properly and provided false information to the stock market regulator.

The bank gave Aman Feed various opportunities, including loan rescheduling facility and interest waiver, Afzal said, terming the company a wilful defaulter.

Aman Feed’s Chairman Rafiqul Islam did not respond to phone calls and text messages from yesterday.

In the financial year that ended on 30 June 2019, Aman Feed reported Tk 621.68 crore in sales, up 15 per cent from a year earlier.

The company’s sales rose 20 per cent year-on-year to 160,870 tonnes in its 2018-19 financial year, according to its annual report for 2019.

Aman Feed’s net profit dropped 11 per cent to Tk 47.87 crore in the 2018-19 financial year from a year earlier, while earnings per share also declined.

The company offered a 13 per cent cash dividend in 2019, down from 20 per cent cash and 10 per cent stock dividend announced in the previous year.

As on 30 June, sponsors held 63.26 per cent shares of the company while general public 24.24 per cent and institutional investors the rest, according to the Dhaka Stock Exchange.

“As both AB Bank and Aman Feed are listed companies, we will see if they are doing everything as per the securities rules. We will take steps if they do anything wrong,” said Mohammad Rezaul Karim, BSEC spokesperson and executive director (current charge).

Stocks of Aman Feed closed at Tk 29.5 on the DSE on Thursday, up 3.5 per cent from the previous day.Report:The Daily Star