In a move to sustain industrial production and maintain market stability, Bangladesh Bank extended policy support and relaxed financial restrictions under the Bank Company Act for two Beximco Group companies — Shinepukur Ceramics and Beximco LPG Unit-1.
The two companies have been exempted from complying with Section 27Kaka(3) of the act, a move expected to ease difficulties in opening letters of credit (LCs) and securing working capital to import raw materials.
The central bank issued a circular today (12 October) granting the exemption until 31 December 2027.
Under the facility, Shinepukur Ceramics, a listed company, can now open LCs with a 15% margin, down from the previous 100%. Despite not being a defaulter itself, the company had been treated as one because of defaults by other Beximco Group companies.
Beximco LPG Unit-1, meanwhile, will be allowed to open LCs with a 100% margin. Previously, defaults by other group companies had prevented the LPG business from opening any LCs.
Following the fall of the Awami League government on 5 August 2024, Beximco LPG Unit-1 was unable to open LCs and had to buy raw materials from other domestic LPG companies to supply the market. The new facility will allow it to import raw materials directly.
Earlier, the Bangladesh Securities and Exchange Commission (BSEC) restructured the boards of three listed Beximco Group companies, excluding the group's vice-chairman, Salman F Rahman.
Shinepukur Ceramics
The Bangladesh Bank notification said the central bank had granted the facility under the powers conferred by Section 121.
It said that although Sonali Bank's customer Shinepukur Ceramics Limited is a loan defaulter, its existing working capital limit of Tk105 crore had been renewed in the national interest. The renewed facility will remain valid until 31 December 2027.
As a result, the company will not face any complications under Section 27Kaka (3) of the Bank Company Act, 1991.
The central bank imposed two conditions for the facility. First, the Finance Division will bear no liability for the credit facility, and Sonali Bank will not be able to claim financial assistance from the government in the future.
Second, all earnings of Shinepukur Ceramics must be deposited into a designated account, from which Sonali Bank's dues must be repaid regularly on a proportional basis.
A Beximco Group official, speaking on condition of anonymity, said, "Shinepukur Ceramics will be able to operate at its optimum capacity following approval for the renewal of its working capital facility. Since 5 August, the company had been required to open letters of credit (LCs) with a 100% margin, while its funded facilities had declined to Tk35 crore from Tk80 crore."
Beximco LPG Unit-1
A separate notification said National Bank PLC had been allowed, under Section 121 of the Bank Company Act, to open letters of credit (LCs) and provide working capital to its loan-defaulting customer Beximco LPG Unit-1 Limited against a 100% margin.
Subject to certain conditions, the restrictions under Section 27Kaka(3) of the Bank Company Act, 1991, will not apply to the facility until 31 December 2027.
The conditions stipulate that the facility will not create any liability for the government or Bangladesh Bank, and National Bank will not be entitled to seek financial assistance from either in the future.
All earnings of Beximco LPG Unit-1 Limited must be deposited into a designated account, from which National Bank's dues must be repaid regularly on a proportional basis.
Earlier, following a request from the group, the BSEC approved the reconstitution of the boards of three listed Beximco Group companies — Beximco Pharmaceuticals, Beximco Ltd and Shinepukur Ceramics — excluding Vice Chairman Salman F Rahman, to break a years-long deadlock and resume regular operations.
With Salman F Rahman, former private industry and investment adviser to ousted prime minister Sheikh Hasina, excluded, the three companies will operate without him on their boards for the first time since their inception, according to group sources.
Salman agreed in September to step down from the boards of Beximco's listed companies to resolve the prolonged operational deadlock and restore full operations. He has remained in custody since August 2024 over multiple criminal charges.
Following consultations with the government and regulatory bodies, Beximco Group applied to the BSEC to reconstitute the boards of its listed companies.