IDLC sues Pacific Denims to get back loan

IDLC Finance Ltd has recently filed a case under the Artha Rin Adalat Ain, 2003 (Money Loan Court Act, 2003) against Pacific Denims Limited to get a loan of Tk2.94 crore back.

Later, Artha Rin Adalat issued a summons notice against Pacific Denims officials and asked them to respond by 9 March, 2021.

Pacific Denims' Company Secretary Md Sorhab Ali said they have already paid their principal loan to the IDLC. The company has sought time until June 2021 to pay the rest of the amount due to the Covid-19 crisis, but the IDLC did not grant it.

A few years ago Pacific Denims received a Tk5 crore loan from IDLC Finance Ltd.

Requesting anonymity, an official of the IDLC Finance said, "The company [Pacific Denims] has not been paying the loan for a long time. We issued several letters to recover the money but the company has not paid."

The main activities of the company are concentrated on: manufacturing, dyeing, weaving, finishing, and exporting  denim fabrics.

The revenue of the company was Tk95.70 crore from July to December in 2020. At the same time, the net profit of the company was Tk5.92 crore.

Last fiscal year, the company recommended a 10% stock dividend for its shareholders and its net profit was Tk8.84 crore.

The company has not paid a cash dividend for its shareholders since it was listed on the stock market in 2017.

In December 2018, The Bangladesh Securities and Exchange Commission (BSEC) fined Pacific Denim's Managing Director Shafiqul Azam and three other directors a total of Tk12 lakh.

The company claimed that the construction of the factory building cost TK21 crore, but it was involved in irregularities and misuse of funds.

The company was listed on the stock exchanges in 2017. Its short term loan was Tk15.38 crore and long term loan was Tk50.43 crore as of 30 June, 2020.

Sponsors and directors jointly hold 30.97% of the company's shares, while institutes hold 25.50%, foreign investors hold .02% and general investors hold 43.51%.