Janata Bank puts Globe Janakantha assets up for auction to recover defaulted loans

State-owned Janata Bank PLC has issued an auction notice for the assets of Globe Janakantha Shilpa Paribar, including the iconic 15-storey ‘Janakantha Bhaban,’ to cover for defaulted loans amounting to Tk 2.15 billion (Tk 215 crore).

Interested bidders have been directed to submit their applications to the court by 2:00 pm on April 28. Applicants must include a pay order or bank draft equivalent to 10 percent of the reserved price. The reserved price will be disclosed during the auction, and the bidding process will follow court regulations.

The bank noted in the advertisement that neither the bank nor the court would take responsibility for any disputes arising after the sale of the assets.

The loan was disbursed in 2021 through Janata Bank’s Dilkusha Corporate Branch, reportedly following a recommendation from Salman F. Rahman, the then-private industry and investment adviser to former Prime Minister Sheikh Hasina.

Records show that in August 2020, Salman F. Rahman sent a letter to the Janata Bank Chairman recommending Tk 2.5 billion (Tk 250 crore) in working capital for Globe Janakantha. The recommendation cited financial losses allegedly incurred by the company during the BNP-Jamaat alliance government.

Subsequently, in September 2021, the Janata Bank board approved Tk 2.25 billion (Tk 225 crore) in working capital for five concerns under the group. The Bangladesh Bank issued a No Objection Certificate (NOC) for the loan two months later.

Globe Janakantha Shilpa Paribar consists of eight entities, including Globe Metal Complex, Globe Insecticides, Globe Cables, and the daily newspaper ‘Janakantha.’ However, most of these units are currently inactive. In March, the daily ‘Janakantha’ suspended both its print and online operations.

Hafizur Rahman, the group’s former Chief Operating Officer (COO), told media outlets that the industrial group is currently burdened with massive debt.

Janata Bank’s Non-Performing Loan (NPL) Crisis

Janata Bank is currently struggling under a heavy burden of defaulted loans from large conglomerates such as Beximco, S. Alam, Thermex Group, and AnnonTex Group. By the end of last year, the bank’s total disbursed loans stood at Tk 979.34 billion (Tk 97,934 crore), of which 74 percent has been identified as bad or defaulted loans.

The Managing Director of Janata Bank, Md. Mujibur Rahman, stated that the bank prioritizes auctions under the Money Loan Court Act to recover defaults. “Response to auctions is not always positive, particularly for large amounts. If recovery through auction fails, we proceed with legal lawsuits as per the law,” he said.

Following the fall of the Awami League government on August 5, the bank has initiated several cases against loan defaulters. Last year, Janata Bank managed to recover Tk 9 billion (Tk 900 crore) in defaulted loans.