BSEC moves to bring debt-ridden RSRM back into business

The Bangladesh Securities and Exchange Commission (BSEC) has decided to investigate the overall business situation of Ratanpur Steel Re-Rolling Mills (RSRM) Limited, a Chattogram-based company owned by Ratanpur Group burdened with crores of default loans.

Two steel plants of RSRM, a listed company, have been closed for the last two and a half years due to debt and a lack of working capital.

The number of cases filed against the group now stands at 30 for defaulting on Tk2,500 crore loans taken from ten banks.

The securities regulator took the initiative as investors are being deprived of their expected return as the company did not declare a dividend for a few years and the reopening of the company's two factories remains uncertain as of today.

BSEC sources said the commission wants to form an inquiry committee to look into the company's business for the interest of investors. It also wants to review the financials of the company through a special auditor.

In addition, the commission has decided to nominate independent directors to the company's board. But how many directors will be nominated is yet to be fixed, sources told The Business Standard.

Earlier, the company's Managing Director Maksudur Rahman, and two other directors — his son Mizanur Rahman and his wife Shamsun Nahar Rahman — sold their entire shares of South Bangla Agriculture and Commerce Bank (SBAC) to reopen the factories. But the company management has yet to restart the factories.

Maksudur Rahman was also the director of the SBAC bank till 2020 and his son Mizanur Rahman and wife Shamsun Nahar Rahman were the sponsors of the bank.

According to the bank and court information, Trust Bank and Global Islami Bank recently filed two more cases against Ratanpur Group with the Chattogram money loan court.

The Trust Bank's CDA branch filed a case against Modern Steel, a subsidiary of Ratanpur Group, on 11 April for the recovery of Tk188 crore. In that case, the Chattogram money loan court on 16 July banned the three directors of the company from leaving the country.

Earlier on 23 March, the Global Islami Bank's Agrabad branch filed a case against Ratanpur Ship Recycling Industries Ltd, another subsidiary of Ratanpur Group, for the recovery of Tk80 crore. The court summoned the directors.

Ratanpur Group is one of the largest industrial conglomerates in Chattogram. It is mostly known for its flagship company RSRM. Founded in 1984, the group had around 800 employees engaged in production till 2019. The annual turnover of the company was about Tk700 crore at that time.

But on 12 December 2020, two of the group's steel factories stopped producing rods due to long-standing electricity bill arrears and a lack of working capital.

Ratanpur Group owes Tk1,200 crore to Janata Bank, Tk650 crore to Sonali Bank, Tk150 crore to Mercantile Bank, Tk80 crore to Global Islami Bank, Tk188 crore to Trust Bank, Tk55 crore to Lankabangla Finance and Tk24 crore to Prime Finance.

In various cases filed by the banks, Ratanpur Group Managing Director (MD) Maksudur Rahman, Chairman Shamsun Nahar Rahman, MD's brother Yunus Bhaiya, two sons Mizanur Rahman and Marzanur Rahman, and Chairman of Modern Steel Mills Limited Md Alauddin have been accused.