Zahir Uddin Tarique did not have much experience in entrepreneurship.
Yet, he witnessed a meteoric rise after starting his first shoe business in 1999 at Chattogram Export Processing Zone (CEPZ).
Originally from Barishal, he built five businesses over the years – Papella Limited, UFM (BD) Limited, Zeil's Ware Limited, Prime Footwear Limited, and Paduka Shoes Limited.
The first two were set up at CEPZ, the third and the fourth in Cumilla's Chauddagram, and the fifth in Chattogram's Bayezid area.
Except for Paduka Shoes, the four other companies supplied shoes to several well-known foreign brands, such as Germany's Deichmann SE. Business was good in the first few years.
But a series of irregularities, such as not delivering products on time, and not maintaining product quality, over the years eventually led to the closure of all five businesses before the Covid-19 pandemic.
Before the closure, workers also protested against irregular wage payments several times in 2019.
Zahir now owes Tk254 crore to banks and non-bank financial institutions.
Some of his employees alleged that he had bought lots of land property with bank loans instead of putting the money in his businesses, leading to the downfall.
They also alleged he built a house in Canada by laundering money.
But Zahir denied all the allegations.
He said the export sector had not done well for a few years even before the pandemic.
Speaking about workers' protests before factory closures, he said wages had been hiked in November 2018.
"This increased our costs, but we could not make as much profit from exports. At one stage, we temporarily closed the businesses.
"Then after the pandemic hit Bangladesh, we could not reopen, as the impacts of the health crisis led to capital shortages. We did not get any stimulus support. That is why we now owe to banks," he added.
Business success and collapse
Zahir once lived in London. After returning home, he first worked at his maternal uncle's factory at CEPZ before setting up his factory.
Though his enterprises had done good business with foreign companies in the initial years, he started losing customers gradually for failing to deliver products on time.
Bata in 2010 cancelled its contract with Zeil's Ware as the latter failed to maintain product quality.
In 2012, Zahir built another shoe enterprise named Zeil's Shop. It has some 30 outlets across the country.
But it did not gain much popularity and slipped into losses.
In 2019, Zahir's businesses suffered cancellations of purchase orders due to shipment delays.
Requesting anonymity, a former UFM (BD) official said Zeil's Ware had done good business as an export-oriented company for nearly a decade but had been in trouble since 2010.
"When foreign buyers cancelled contracts because product quality was compromised, that was when Zahir started buying the land properties with bank loans instead of fixing business problems," he alleged.
At the end of 2019, the five companies were closed after paying partial wages to the workers.
This correspondent recently visited Papella and UFM (BD) factories at CEPZ and found those closed.
Lenders in the soup
Banks and financial institutions that lent to Zahir are now in trouble.
There are uncertainties over how they will recover the Tk254 crore loans given to him.
Of the amount, Tk65 crore was taken out from Dutch-Bangla Bank for UFM (BD) which has already become overdue.
Zeil's Ware owes Tk100 crore to BASIC Bank's Karwan Bazar branch, Papella owes Tk55 crore to Uttara Bank's Karwan Bazar branch, and Zeil's Shop owes Tk5 crore to NRB Bank's principal branch.
Besides, Tk29 crore was borrowed from LankaBangla Finance's Agrabad branch.
Papella and UFM (BD) also owe around Tk5 crore to various government agencies in utility bills.
LankaBangla Finance Vice-President and Head of Agrabad branch MdSolaman Hossain said his organisation had lent Tk29 crore to four of Zahir's five enterprises.
He said no loan instalments were repaid since last year.
Forty decimals of land were mortgaged in Chauddagram against the loans, he added.
Dutch-Bangla Bank's Chattogram corporate branch officials said UFM (BD) had begun dealings with the bank in 2017, and initially, everything was fine.
But the company began delaying repayments in 2019. At present, it owes about Tk65 crore to the bank's Agrabad branch, they said.
They also said the bank would soon take legal actions against the company for recovering the loan.
CEPZ General Manager Moshiuddin Bin Mesbah said about 2,000 workers were employed at Papella and UFM (BD).
He said outstanding utility bills of shut down businesses are usually recovered by auctioning their assets.
Misusing bond facilities
There are also allegations against Zahir of importing raw materials under bond facilities and selling them in the local market.
Multiple cases have been filed by the Chattogram Bond Commissionerate office against Zeil's Ware and Paduka Shoes.
Zeil's Ware has been accused of secretly moving Tk17.5 crore of goods from its factory that was imported under bond facilities.
At the end of 2018, the commissionerate filed a case against the company, accusing it of duty evasion amounting to Tk12.69 crore.
The company was also accused of the same offence a year earlier.
Later, when the allegation was found to be true, Zahir paid a Tk30 lakh fine.
He also gave an undertaking that he would never commit such offences.