Bangladesh News

The government is planning to take back the ownership of eight formerly state owned textile mills from the current private managements due to their failure to run those efficiently.

Government authorities alleged that the managements, whose personnel are former workers and employees of the mills, of misappropriation of funds, failure to pay any instalment of the share prices to the government, and of selling and leasing out mill lands violating contracts.

Bangladesh Textile Mills Corporation (BTMC) prepared a position paper regarding the matter, to be submitted soon to the chief adviser to the caretaker government for consideration.

“Yes we are thinking of taking back the managements of eight formerly state owned textile mills from the former employees of the mills to whom the government handed over the ownership. They breached the contract with the government in many ways. They failed to repay bank loans, and to pay other liabilities but siphoned off crores of taka by selling valuable machinery from the mills,” Sharful Alam, chairman of BTMC, said.

BTMC is in a dire situation as different banks and other financial institutions have initiated processes to auction off the BTMC building, the chairman said. “We have to protect the once reputed institution from being ruined as it is still serving thousands of rural weavers who mainly depend on cheaper yarns from BTMC,” he added.

BTMC will be able to successfully operate the eight textile mills worth over Tk 1,000 crore by leasing them out to more competent management contractors.

According to the agreement between the government and the workers and employees who currently possess the mills, the government is empowered to take back the ownership of those mills any time if the current managements breach the agreement.

The current managements of the mills owe Tk 675.16 crore to different gas providers, Tk 232.15 crore as land tax, Tk 204.36 crore as municipality tax, and Tk 11.11 crore as surcharges, sources said.

The authorities of the mills failed to pay any instalment of Tk 8.83 crore share prices for the mills to the government.

The current managements of the mills also owe Tk 253 crore to banks as long term repayment of loans. They owe Tk 210 crore to BTMC for loans taken from different banks for import purposes, which they inherited from the corporation at the time of purchase.

The then Awami League government in March 2001 handed over the ownership of the eight state owned ailing textiles mills to newly formed boards of directors comprising employees and workers of the mills to continue operations of those and to save the jobs.

Sources alleged that persons who have been managing the mills since the handover are mostly labour leaders, who do not have experience in managing such mills.

At the time of the handover of the mills it was agreed that the workers and employees who own the mills should re-employ former workers, but a section of the labour leaders who became directors did not let that happen.

The current directors however have been reaping personal benefits by leasing and renting out different facilities of the mills, the sources said.

The eight mills are — Dhaka Cotton Mills in the capital, Munnu Textile Mills in Tongi, Fine Cotton Mills in Tongi, New Olympia Textile Mills in Tongi, Meghna Textile Mills in Tongi, Laxmi Naryan Cotton Mills in Naryanganj, Pylon Industries Limited in Chittagong, and Karolin Silk Mills in Chittagong. The mills possess over 74.83 acres of land.

Matiur Rahman, managing director of New Olympia Textiles Mills Limited, however said the government also breached some sections of the agreement making it difficult for the current managements to comply with the full agreement.

“BTMC did not permit the mill operators to have balancing, modernization, rehabilitation, and expansion of the mills. It also did not pay the utility bills which it was supposed to pay,” Rahman said.

He denied the allegation of money being siphoned from the mills through sales of machinery.