S Alam Group's 8 factories reopen, but production remains halted

Highlights

• S Alam Group reopens eight factories today, but production remains halted due to a raw material shortage
• The ACC is freezing the bank accounts of the eight factories amid investigations into financial irregularities
• Owner Mohammed Saiful Alam Masud is alleged to have siphoned off significant funds from the banking sector 

A week after announcing a temporary closure, the controversial S Alam Group reopened eight factories today (1 January).

Production at the factories, however, remains halted due to a shortage of raw materials, its officials said.

"The closed factories have been reopened following the owner's instructions. But, no production has taken place due to a shortage of raw materials," Ashish Kumar Nath, a deputy manager at S Alam Group, told TBS.

He further said since raw materials cannot be imported, there is uncertainty regarding the production at the factories.

"The management is considering whether production can be initiated using raw materials sourced from the local market [other importers]. No decision has been made on this matter yet though," Ashish added.

An official of S Alam Cold Rolled Steels said, "After receiving the reopening notice on Tuesday night, I reported for duty today [Wednesday]. However, we did not run the machines – no production took place at the factory. So, I marked my attendance and left."

On 24 December, a notice signed by the Chattogram-based group's Head of Human Resources and Administration, Mohammad Borhan Uddin, stated that under the directive of the management, the factories would remain closed until further notice due to unavoidable circumstances. 

However, the security, supply, and emergency departments of the factories will remain operational, it added.

S Alam shuts down 8 sugar, steel, bag factories

Upon seeing the notice, factory workers immediately staged protests. However, officials assured them that the factories would reopen once the situation improved.

On Tuesday evening, Borhan issued another notice stating that the closure order issued on 24 December had been withdrawn following a decision by the management. This directive would take effect from 1 January, it reads.

The factories that reopened are sugar processing plant S Alam Refined Sugar Industries; steel processing plants S Alam Cold Rolled Steels and Infinity CR Strips Industries; corrugated iron and steel product manufacturing units S Alam Steel, S Alam Cold Rolled Steels Limited, Cheman Steel, and Galco Steel; and the bag manufacturing plant S Alam Bag Limited.

The Anti-Corruption Commission (ACC) has recently issued a letter to the Bangladesh Financial Intelligence Unit to freeze the bank accounts operated under the names of the eight enterprises.

According to officials familiar with the matter, the ACC move comes to stop any possible fund transfer from the accounts under the names of the eight entities.

The owner of S Alam Group, Mohammed Saiful Alam Masud, was a close associate of the ousted prime minister Sheikh Hasina and allegedly benefited from the financial sector. In 2017, he took control of the country's leading commercial bank, Islami Bank Bangladesh. 

Subsequently, the group seized several other banks and insurance companies, allegedly withdrawing large sums of money from these institutions under various names. Additionally, loans were allegedly approved in the names of various entities linked to the group.

The banks under the control of S Alam Group include National Bank, Islami Bank, First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank and Bangladesh Commerce Bank.

After the fall of the Hasina-led Awami League government, the Bangladesh Bank freed these banks from the control of S Alam Group.

The group took nearly Tk1.5 lakh crore in loans from various banks, both in its own name and under different aliases, according to media reports.

In an interview with the British media outlet Financial Times, Bangladesh Bank Governor Ahsan H Mansur said the S Alam Group chairman and his associates have "at least siphoned off $10 billion from the banking system.

Since the ouster of the Hasina government on 5 August, it is believed that Masud and his brothers have gone into hiding or fled the country.