The Financial Express

Accord-victim RMG factory now battles local foe

Owners' attempt to restart production faces hurdles from leaseholder

FE REPORT | Published: January 20, 2020 10:47:29 | Updated: January 22, 2020 10:48:24

- File photo - File photo

Liberty Fashion Wears Limited, a closed apparel manufacturing company, on Sunday alleged that its tenant company Sinha Knit and Denim Ltd is trying to capture its property forcefully.

The Sinha Knit has also stopped paying the rentals since April 2018, Liberty chairman Mozammel Haq also raised the allegation at a press conference at the National Press Club in the city.

He said the management of the tenant company is not even allowing him and other staff of the Liberty fashion to enter into the factory premises at Jirani in Savar.

In October 2016, Liberty leased parts of its factory at a rental of Tk 0.695 million per month under an agreement with the Sinha Knit.

Mr. Mozammel claimed that his company was a regular supplier of denim (jeans) to UK-based Tesco, Primark and others, and the monthly export volume was 0.3 to 0.35 million units in 2013. The company exported denim products worth US$ 3.5 billion annually.

After the Rana Plaza Tragedy, he said Tesco and other buyers had stopped importing products from the Liberty based on report by the Accord, a platform of the European buyers.

In June 2013, the accord forced them to shut the factory without any rational reason and proper inspection, he alleged.

He said the Accord sent a notice to its signatory brands not to source goods from Liberty based on a baseless inspection by Pakistan-based Medway Consultancy Services (MCS), which prepared a report seven years ago without inspecting the factory and insisted that the factory would collapse in next 60 hours.

"But the factory is still in production without any kind of accidents," he added.

The state-of-the-art factory having a floor space of 0.35 million square feet has been forced to shut down, making around 5,000 workers jobless, said the company chairman.

Following the closure, he said, the company got permission through an arbitration at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and leased parts of the factory to Sinha Knit in an effort to make up some of the losses.

"But, unfortunately, the Sinha Knit has been depriving Liberty of its lawful claim of rental," said Mr. Mozammel. "And, the most shocking fact is that our tenant, Sinha Knit is not allowing us to enter into the factory premises. Rather, they are selling out our machinery illegally."

He said the BGMEA has also asked the Sinha Knit to allow the owners of Liberty to enter the factory, but they were not following the BGMEA instruction.

He said that his company has recently won a case in Hague, Netherlands where the previous buyers have agreed to place orders again with Liberty for denim products.

"We want to use parts of my factory (which remain out of the lease agreement) to start operation again, but the Sinha Knit authority is not allowing us to enter the factory," he said.

"We think, they intend to capture all of the properties of Liberty Fashion forcefully."

Other officials of the Liberty Fashion said their total outstanding with different banks including Eastern Bank Ltd, Shahjalal Islami Bank and Social Islami Bank Ltd would be about Tk 2.35 billion.

If Liberty cannot start operation, it would not be able to repay the loans, they added.


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