Exactly two years ago, Finance Minister AH Mustafa Kamal, commenting on resolving the loan crisis between state-owned Sonali Bank and industrial conglomerate Hallmark Group said, “Hallmark still has the capability to run their business. We cannot create new business people in the country, rather we will have to patronize the existing ones”.
In September 2019, the Finance Minister told reporters on the day after a meeting of the cabinet committee on economic affairs: “You have to believe that Hall-Mark will pay back the money. They will start a business again”.
The minister said, “I want that they will pay back the bank loan, and live their life smoothly”.
Hallmark’s managing director Tanveer Mahmud applied to AH Mustafa Kamal, immediately after he was sworn in as finance minister, (on January 15, 2019) seeking a chance for him, and his wife Jesmin Islam (Hallmark Group’s chairman) to re-launching commercial operation of their company.
In the application, Tanveer said his company would make the 2 percent down payment for loans from its fund worth BDT 1 billion held at different bank accounts, which currently remained frozen, for the rescheduling.
He said, if they were allowed a bailout, they would start commercial operation of their factories, and repay the bank loans gradually. It submitted a plan, saying they would pay BDT 120 million crore in the first year, BDT 24 crore in the second year, and BDT 1 billion from third year to Sonali bank.
Within three weeks after receiving the Hallmark’s application, the financial institution division wrote to the Sonali bank asking for details about Hallmark’s loan status. Sonali bank replied in March, according to financial institution division sources.
In its reply, Sonali bank opined that a high-level multi-stakeholders meeting might be arranged between ACC (Anti Corruption Commission), Bangladesh Bank, finance ministry, law ministry, and Sonali bank to discuss the issue.
While Finance Minister AH Mustafa Kamal’s decision was not only praiseworthy, it was the only way of resolving the long-standing loan issue between Sonali Bank and Hallmark Group, implementation of this decision would save one of the largest industrial conglomerates in the country in getting totally ruined.
It may be mentioned here that, activities of Hallmark Group were forced to pause as its managing director Tanveer Mahmud, chairman Jesmin Islam and other top officials were sent to prison in 2012. It has already been over 9 years that the entire project is stopped with machinery and equipment worth hundreds of millions of dollars getting wrecked due to lack of maintenance and operations. For a country like Bangladesh, letting such a massive industrial project that had employed over 30 thousand people would be a great loss. Moreover, the problem can never be solved by keeping Tanveer Mahmud and others inside prison indefinitely.
Commenting on Hallmark Group issue, a financial expert said, Anti-Corruption Commission (ACC) and Bangladesh Bank have been investigating the case of Hallmark Group for years and there had not been any evidence of Hallmark owner’s smuggling-out the loan money outside Bangladesh. Moreover, the company has solid assets which would be at least double the amount of the loan. Once the owners of Hallmark Group are set out of prison on bail on condition that they would gradually begin production of the factory units and start refunding the loan amount, it will save state-owned Sonali Bank from the existing burden of loan that it had provided to Hallmark. At the same time, this can also become an example of how a troubled industrial project can be salvaged from the loan burden.
The expert said, “People may feel pessimistic about letting Hallmark Group’s managing director Tanveer Mahmud and other set out of prison on bail and start refunding the loan amount, there really aren’t any alternative to it”.
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