Northern Jute shuts production

Staff Correspondent | Published at 11:04pm on February 23, 2020

Northern Jute Manufacturing Company Limited has shut down its mill for an indefinite period as the Bangladesh Bank froze all of its bank accounts over its alleged connections with suspected swindler PK Halder.

Northern Jute officials said that the BB froze all of the company’s bank accounts two weeks ago which made continuation of business difficult.

The mill might remain shut until the restrictions are lifted, they said.

Earlier on January 22, the High Court ordered the BB to freeze all bank accounts of Prasanta Kumar Halder and his associates after reports in the media emerged stating that the suspected fraudulent businessman had fled after embezzling funds Tk 3,000 crore.

The reports also said that PK Halder had control over Northern Jute amid buying significant amount of its shares.

PK Halder allegedly made People’s Leasing chairman Ujjal Kumar Nandi chairman of Northern Jute.

Loans amounting to Tk 170 crore were taken from International Leasing and Financial Services in the names of Simtex, Rahman Chemicals, and Northern Jute, companies taken over by PK Halder.

The Anti-Corruption Commission filed a case against him on January 8 for amassing wealth illegally.

According to the web site of the Dhaka Stock Exchange, Northern Jute said that the Bangladesh Bank governor froze all the bank accounts of Northern Jute as per the High Court order dated January 22, 2020, on ‘Financial Institution Matter No 1 of 2019’.

Therefore, the company could not realise any of the proceeds from its exports, it said. Given the situation, the company was unable to procure raw jute, to make any party payments to spare parts suppliers and to disburse any cash dividends to their shareholders, though they were maintaining adequate funds, it said.

Therefore, the company decided to shut down the mill with effect from February 22 this year.

Northern Jute managing director Ananga Mohan Roy, however, denied the company had any connection with PK Halder.

He said that the company would file a case against the BB decision today.

Roy also claimed that the company was facing major problems in running its business and was unable to pay salaries.

Share prices of the company shot up from 252 per share on July 26, 2018 to Tk 1,460 on January 13 last year and remained above Tk 1,200 per shares until September 5 last year.