Union Capital asked to return Tk100cr FDR to BATBC 
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SUNDAY, JULY 03, 2022
Union Capital asked to return Tk100cr FDR to BATBC 

Banking

TBS Report
08 May, 2022, 10:05 pm
Last modified: 08 May, 2022, 10:09 pm

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Union Capital asked to return Tk100cr FDR to BATBC 

Union Capital has been struggling to repay the deposit since the beginning of 2018

TBS Report
08 May, 2022, 10:05 pm
Last modified: 08 May, 2022, 10:09 pm
Union Capital asked to return Tk100cr FDR to BATBC 

The central bank on Sunday asked the Union Capital Limited (UCL) to return the matured fixed deposit receipt (FDR) of Tk100 crore to the British American Tobacco Bangladesh Company Ltd (BATBC) as soon as possible.

The Bangladesh Bank held a meeting with UCL and BATBC in this regard.

Ahmed Jamal, deputy governor of the central bank, presided over the meeting attended by Managing Director (MD) of Union Capital ANM Golam Shabbir, representatives of BATBC and senior officials of the Bangladesh Bank.

According to the central bank sources, Union Capital has asked for time till 2030 in the meeting. But, the central bank refused to give more time and asked the financing company to repay the deposits in the shortest time possible.

"We have a lot of customers whom we have to pay their FDR, and we need time to do that," said Union Capital MD Golam Shabbir.

"We have made regular payments to BATBC till 2018 with a profit of Tk50 lakh from this FDR. However, our payments have become irregular since 2019," he added.

The central bank also advised Union Capital to recover the unpaid loan in any means possible by giving customers the opportunity to waive interest on the loans. In addition, the company should take judicial assistance in recovering the debts of defaulters.

In this regard, Sheikh Shabab Ahmed, head of External Affairs at BATBC, told The Business Standard, "As a depositor, we want our money as soon as possible. Recently, we had a tripartite meeting and we are looking forward to an acceptable solution."

Meanwhile, BATBC claimed that the Tk100 crore FDR, which was opened in 2017 at 10% interest for a period of one year, has now gone up to Tk110 crore including interest.

Union Capital has been struggling to repay the deposit since the beginning of 2018. In the same year, the company returned only some of the interest citing inability to pay the principal amount.

According to BATBC officials, the multinational company has not got much of the deposited amount back so far. Although some interest has been refunded from time to time, the entire deposit remains unpaid.

Failing to repay, the financial institution has now offered to renew the FDR till 2029 at 1% interest. In 2030, all the money will be returned in installments, Union Capital offered.

But, BATBC rejected the offer, citing the period as "too long."

According to the information given by BATBC Company Secretary Azizur Rahman, BATBC's total dues stand at Tk110 crore now.

"The FDR was kept with Union Capital under certain terms and conditions. But they have been non-compliant since 2018 as the tenure expired," Azizur added.

Meanwhile, Union Capital has been losing money since 2019. According to the audited financial report, the company is still running at a loss since 2019. It incurred Tk106 crore loss in that year, Tk53.24 crore in 2020, and Tk143.56 crore in 2021.

In the last 2021 financial year, the company's earnings per share (EPS) stood at Tk8.32. Investors have not been paid dividends since 2019. The company's other financial indicators are not good either.

Top News

Bangladesh Bank / Union Capital / BATBC

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