He started out as a promising apparel businessman and eventually owned three garment factories. But while his business thrived, his management skills apparently started to fall apart.
Md Morshed now owes Tk280 crore to three banks and most of the loans have become classified and default. Two banks have filed 14 cases against him so far and arrest warrants have been issued against him in 12 cheque bouncing suits.
He is now a fugitive in the US. He fled there with his third wife in early 2018. All three of his factories are now closed.
Morshed, who hails from Mehedibag area in Chattogram city, entered the garment business run by his family who once owned several well-known apparel factories in the port city, including Kash Garments, Cason Garments, Herald Garments, and Samroj Garments.
He exited the joint family business and started out on his own with C&A Textiles in 1995. He was the managing director while his father Md Sekandar Mia became the chairman and his brother Md Arshad held the directorship.
Initially C&A Textiles' made good progress. Flush with success, Morshed bought two more garment factories – Ifco Garments and Samroj Garments.
But that is when he allegedly lost his focus in business. After 2015, he became completely detached from business due to family feuds according to people who know him.
His business began to stumble and the bank loans started turning bad.
To turn his business around, he took C&A Textiles public in 2015 and raised about Tk293 crore from the market. However, he allegedly did not spend the money raised from the stock market in managing and expanding his business.
Near the end of 2016, production came to a halt at all his three companies. On a visit to the Bangladesh Small and Cottage Industries Corporation (BSCIC) industrial area in Kalurghat on Wednesday (3 February), a man was found sitting outside the main entrance to the C&A Group's office.
Outer walls of the office were covered in creepers and weed--sign of neglect and no activities for long. Security guards at the adjacent factory said locals and Ifco Garments workers – who Morshed owes to – had taken away equipment, doors, and windows of the factory.
Banks could not take proactive steps to recover their money even though he did not repay the loans for a long time.
Kotwali Police Station Officer-in-Charge Nezam Uddin said there is an arrest warrant against Morshed at his police station.
"But he [Morshed] is at large," he said.
How bank dealings went bad
According to information obtained from banks, C&A Textiles owes First Security Islami Bank Tk139 crore. Moreover, Samroj Garments owes Tk79 crore to Standard Bank, and Ifco Garments Tk62 crore to Al-Arafah Islami Bank.
Standard Bank Vice-President and Manager of Jubilee Road branch Md Abu Hena Nazim Uddin described Samroj Garments as a long time client of the branch.
He said Morshed's transactions were good at first.
"But he later dilly-dallied in repaying loans. I heard that he had already left the country. We tried many times in the past in vain to recover the loan. That is why we were forced to take legal action against him."
Md Aminur Rahman, former manager of Al-Arafah Islami Bank's Agrabad branch, said Morshed's company had taken out loans and made profits by exporting clothes but later did not repay the loans.
He said Morshed had squandered the loans.
Aminur also said the equipment of Morshed's factories and four industrial plots in Kalurghat industrial area are mortgaged to the bank.
Between 2006 and 2015, Samroj Garments borrowed from Standard Bank to add to its working capital and export raw materials. Morshed was good at the beginning in his dealings but started making delays in repaying loans after 2015.
From January to June 2016, the bank's Jubilee Road branch sent 14 letters to the company, asking it to repay loans, but Morshed did not.
After failing to recover loans, the bank on 13 September last year put on auction 17.75 decimals of the mortgaged property, including a three-storey building owned by Morshed. But the property could not be sold as it was in Morshed's possession and no buyer was found either.
Later, on 8 December, the bank sued the company in Artha Rin Adalat in Chattogram. According to the case documents, Samroj Garments owes the bank Tk78.53 crore.
The bank had earlier filed two cases against the company under the Negotiable Instruments Act. Hearings in the lawsuits filed in 2018 are underway.
Ifco Garments borrowed from Al-Arafah Islami Bank's Agrabad branch in 2010 to handle pre-shipments and back-to-back letters of credit (LCs), but the loan had not been repaid in 11 years. The bank filed 11 cases against Morshed for not repaying the loans on schedule.
Of the cases, 10 were filed under the Negotiable Instruments Act in 2017. Also, on 10 January that year, a case was filed with Artha Rin Adalat. In that lawsuit, the company was sued for owing the bank Tk62.39 crore.
Between 2013 and 2015, C&A Textiles took out loans from First Security Islami Bank's Agrabad branch for different terms. At present, it owes the bank Tk139 crore. Of the amount, Tk134 crore has already been classified as a bad/loss (BL) loan.
A senior official of the bank said four BSCIC plots, including machinery of C&A Textiles factories in Kalurghat industrial area, are mortgaged to the bank against the loan.
But not even one-third of the debt could be recovered by selling the collateral or handing them over to someone, he added.
Shareholders in limbo
After C&A Textiles was listed in 2015, it raised about Tk293 crore from the market by selling 23 crore 93 lakh 16 thousand shares.
Its shareholders are now in trouble as Morshed has reportedly fled to the US.
At present, directors hold 22.14% of the company's shares while institutional investors and general investors own 15.67% and 62.19% respectively.
The last time the company paid its investors was in 2016 when it paid a 10% stock dividend.