BJMC chooses $87 over $90 for every 100 jute sacks

Jute sacks
Jute sacksProthom Alo file photo
Advertisement

Bangladesh Jute Mills Corporation (BJMC) had an opportunity to sell jute sacks at a higher price to registered local companies, which export those after purchasing from the government. Instead, BJMC chose to sign an agreement with a controversial foreign company to sell 135,000 bales of sacks at a lower price without even approaching the local exporters. The Dubai-based company is called Taif International.

In the trade, the government will have to count losses of almost Tk 76.5 million. Taif International is an affiliate of CTC Group, a Sudanese business group. Its chairman is Amin Ahmed Abdel Latif, a former honorary consul general of Bangladesh to Sudan. He was appointed in 1991. The Awami League government removed Abdel Latif from office in 2016 on charges of being involved in anti-Bangladesh activities.

Advertisement
Advertisement

BJMC signed the agreement with Taif International on 30 July, taking the decision to sell the sacks on the day before. According to the agreement, it will buy 135,000 bales of jute at the rate of USD 87 ​​per 100 sacks. One bale contains 300 sacks.

In the past, CTC did not pay BJMC in advance and did not accept the goods even after signing contracts. The Bangladesh Jute Goods Exporters Association (BJGEA) wondered why BJMC did this despite having such experience. BJGEA also has questions about why BJMC chairman Abdur Rauf was forced to sign the contract on 30 July despite falling ill on 29 July. This information has been known from the textiles and jute ministry and BJMC sources.

BJMC director Md Waheduzzaman was transferred from to the Land Records and Survey Department on 4 May by the public administration ministry. Visiting the BJMC office on 3 September, it was seen that his nameplate was still hanging and he was working at the office. Asked about this, Waheduzzaman told Prothom Alo that he would not comment

BJMC chairman was not in the office when the correspondent went to his office on 2 and 3 September. He later said over phone that he did not wish to comment on the matter.

Former BJMC chairman Humayun Khaled has signed the agreement on behalf of Taif but nothing is said about his identity in the contract. On 7 September, Prothom Alo asked Humayun Khaled why and how he signed the agreement, he said that the owner of the company could not manage to come and sign the agreement, so he signed on behalf of Taif. He did not wish to talk about his relation with Taif.

Advertisement
Advertisement
Advertisement

Golden Fibre Trade Center Limited, which has exported jute sacks worth Tk 11.50 billion in Sudan in the last 10 years, is looking at BJMC to purchase jute for USD 90 per 100 sacks. BJMC will get less than USD 900,315 for 135,000 bales of sacks which amounts to almost Tk 76.5 million.

Secrecy of BJMC

BJMC had chosen the time just before Eid-ul-Azha to sign the contract with Taif International, revealed BJMC's board meeting papers. The Eid was celebrated on 1 August. The meeting was held on 29 July and the agreement with Taif was signed on 30 July, the last working day before the Eid.

The board meeting was told that the quality of the sacks was degrading as they were three to four years old and BJMC issued a sale order when an organisation submitted a tender. But the company could not receive the product. The company was Sencom International, another Dubai-based company owned by Amin Ahmed Abdel Latif. This was kept hidden from the board during the meeting.

BJGEA chairman M Sajjad Hossain told Prothom Alo, "BJMC presented false information to the board. The products are neither old nor damaged. It has to be found out what was the interest that led to choose the foreign company over the listed local exporters, though they have exported 80 per cent of BJMC's products.”

In a letter to textiles and jute secretary Lokman Hossain Mia on 12 August, BJMC chairman Abdur Rauf said, "Taif International has not been able to deposit the advance on time."

Advertisement
Advertisement
Advertisement

According to the terms of the agreement, Taif International will have to deposit 10 per cent of the total price of the goods to BJMC within three working days, receive all the goods within 120 days and pay 90 per cent of the price in advance to BJMC before shipping.

Mushtaq Hossain, managing director (MD) of Golden Fibre, told Prothom Alo that there could be no question of filing a case as the agreement was not appropriate. The BJMC had earlier sought the opinion of the law ministry on similar incident to get a neutral opinion. They can do the same again, he added.

Conditions Weren’t Fulfilled

Local buyers had to pay 5 per cent in advance to buy jute sacks from BJMC. But the organisation abruptly increased the deposit to 75 per cent in July. Later, it was made 50 per cent. But surprisingly, for the deal with Taif it was set at 10 per cent. According to the agreement, the advance payment was supposed to be made within three working days (5 July), but that did not happen.

On behalf of Taif International, UK-based money exchange company FairFX PLC sent 10 per cent advance money – US$ 26 lakhs 10 thousand and 893 – to BJMC through Telegraphic Transfer (TT) on 6 August. On 17 August, US$ 23 lakh 48 thousand and 980 was sent from the same place. The money was sent in two tranches through JP Morgan Chess Bank N in New York, USA. The money was held up at a nostro account in Mercatile Bank in New York. The money was released on 3 and 8 September, said Matiul Hassan, deputy managing director of Mercantile Bank.

Questions About the Money Received by TT

BJMC director Md Waheduzzaman was transferred from to the Land Records and Survey Department on 4 May by the public administration ministry. Visiting the BJMC office on 3 September, it was seen that his nameplate was still hanging and he was working at the office. Asked about this, Waheduzzaman told Prothom Alo that he would not comment.

Advertisement
Advertisement

Although there are rules, the TT copy does not have the name and address of Taif International as the sender of the money. The copy neither mentioned the type of product for which the money is paid.

In a letter on 3 September, Golden Fibre told Mercantile Bank that the monetisation of the two TTs could draw ire of the Office of Foreign Assets Control (OFAC) of the US. Textile and jute affairs secretary Lokman Hossain Miah told Prothom Alo, "BJMCE can say better on the issue."

On 6 September, Prothom Alo sent JPMorgan Chess Bank executive director Mollica Senapati an e-mail asking her since BJMC's products would go to Sudan, whether the bank would draw OFAC’s ire for dealings against that product. Around 8:00pm on 8 September, Mollica Senapati said on phone that they had decided to refrain from talking about it.

Golden Fibre MD Mushtaq Hossain said, "Everyone decides to keep mum, which suggests something is fishy.”

* The report, originally published in the print edition of Prothom Alo, has been rewritten in English by Farjana Liakat

Advertisement
Advertisement