The once powerful but now tarnished reputation S Alam Group is struggling to keep its factories running as banks take a tough stance against it.

S Alam or Saiful Alam Masud, once a very influential figure in the Bangladeshi financial sector and chairman of the S Alam Group, was once a controlling force behind seven banks. Masud allegedly drew Tk 1 lakh crore from various banks during Sheikh Hasina’s over 15-year regime.

According to the S Alam Group website, it owns nearly two dozen companies, with total assets valued at around Tk 1.5 lakh crore. These companies operate many factories in Chattogram and other areas.

Sources within the group and the banking industry said banks are increasingly reluctant to engage in new business with the S Alam Group and those willing to open letters of credit (LC) to the imports require a 100% margin due to the group’s tarnished reputation.

This situation has proven difficult for the group, with reports indicating that Masud and his brothers may be in hiding or have fled the country following Hasina’s ouster from power on August 5.

Due to financial pressures, several factories of the S Alam Group have reportedly halted operations, leading to major layoffs as the company struggles to maintain its erstwhile productivity and financial stability.

Two factories, S Alam Vegetal Oil and S Alam Refined Sugar, have already closed and other factories could follow suit, according to Ashish Kumar Nath, deputy director of the S Alam group.

“Some factories, dependent on imported raw materials, have shut down due to our inability to open LCs for imports. The remaining factories may face the same fate,” Nath told TBS.

S Alam Group, a major client of Islami Bank Bangladesh (IBBL), took over the bank in early 2017 by buying back shares in the market in the name of paper-based companies. A senior IBBL official said the bank has now demanded 100% margin from S Alam Group for opening import LCs.

“To protect jobs, factories must stay alive”

The closure of factories or businesses leads to increased unemployment, which is worrying given the country’s current political and economic realities.

Economist Dr Moinul Islam said S Alam had drained around Tk 1.5 lakh crore from banks, most of which may not be recovered. However, he stressed the importance of maintaining the operation of the group’s factories.

“Group companies must be kept alive to protect thousands of jobs. It is up to the government, through the Bangladesh Bank, to decide how to achieve this.”

Moinul Islam, economist

“Group companies must be kept alive to protect thousands of jobs. It is up to the government, through the Bangladesh Bank, to decide how to achieve this,” he said.

“One option would be to allow companies to operate by appointing a curator (like the one appointed for the activities of the Beximco group). However, the time has not yet come to say that the institutions will recover if the curator is appointed,” added Moinul. .

M Hossain Rana, head of human resources and administration of S Alam Group, told TBS that apart from the banking and power sectors, the group has 12 import-dependent factories, which employ at least 30,000 workers in the operations import, production and marketing.

Closure of edible oil and sugar factories

During a visit to the S Alam Refined Sugar Factory on the south bank of the Karnaphuli River last Sunday, TBS found that its operations had been shut down.

Shamsul Alam, a food seller across the factory gate, said the factory had been completely closed for almost two weeks.

A factory worker, on condition of anonymity, said, “The warehouse is running out of raw sugar, which is why the factory is closed. Although there was no official announcement, we learned that we were going to be laid off. “

A senior official of the S Alam Group, who also requested anonymity, said, “Our accounts have been frozen in several banks. Since August 5, we have been unable to open letters of credit for the import of raw materials such as raw sugar, edible oil or steel. cannot operate due to a shortage of these essential materials. »

Data from the National Board of Revenue (NBR) further supports this claim, showing that the S Alam Group has not been able to import raw sugar in the last two months (September and October) due to its inability to open LCs.

More than 60,000 tonnes of unrefined sugar were imported under the name of S Alam Refined Sugar Mills in July and August. The plant’s two units have a combined daily refining capacity of 2,500 tonnes.

Vegetable oil factories in S Alam were also closed due to shortage of raw materials. The company generally imports crude or unrefined oil and refines it.

A local tea seller said, “There was a line of trucks supplying vegetable oil from S Alam, but the factory has been closed for the past one and a half months. Sales at my tea shop have declined due to lack of trucks. drivers and their assistants. »

NBR data shows S Alam imported 18,900 tonnes of crude soybean oil in July, but none between August and October.

The S Alam Refined Edible Oil Plant can refine 200 tonnes of edible oil per day.

The S Alam Group operates other factories on the south bank of the Karnaphuli River in the Moizjartek region, including S Alam Bag, S Alam Steel Mills, S Alam Cement and Chemon Ispat.

These factories were also closed on Sunday between noon and 3 p.m.

Most steel mills closed

The S Alam Group steel business comprises six plants, with S Alam Cold Rolled Steels Ltd and Infinity CR Strips Industries Ltd being the main facilities which convert imported hot rolled (HR) coils into cold rolled (CR) coils by reducing their thickness.

According to factory insiders, the Infiniti CR Strps factory began operations in September 2022. However, after six months of production, the factory ceased operations in March 2023. Since then, it has remained closed for more than ‘a year and a half.

Meanwhile, a steel subplant, S Alam CRM-1, was shut down due to shortage of raw materials and acid.

A CRM official said, “The shortage of chemicals started in the first week of September. At that time, chemicals were purchased from TK Group to continue production for a while, but the factory has been completely closed since October. »

The group’s four sub-mills – NOF, Chemon Ispat, S Alam Steel and Galco – produce steel from CR coils manufactured at the two main mills – S Alam Cold Rolled Steels and Infinity CR Strips.

NOF stopped production due to a lack of raw materials, including zinc and acid. Similarly, production at S Alam Steel and Galco (located in Bangsal, Dhaka) has been stopped since mid-September.

Closed flour mills

Despite getting a loan of Taka 3,500 crore for its three flour mills, only one is currently operational.

In the Sagarika Bscic district of the port city, the Silver Food flour mill is still in operation. S Alam obtained a loan of around Taka 1,000 crore from Islami Bank for this factory using the name of a local resident, Mamunur Rashid of Patiya.

Meanwhile, Ideal Flour Mill, located in Sitakunda, remains closed. Since its acquisition in 2022, the factory has not yet started production.

Layoffs begin

After the change of government on August 5, the Bangladesh Bank issued a series of directives to banks, including freezing the accounts of directors of the S Alam group and banning property transfers.

The group has already started laying off staff at various businesses due to growing financial pressure.

The group has already laid off 50-60 workers from its S Alam bag factory. In response, factory workers staged a protest in Moizzartech area of ​​Chattogram.

Furthermore, a senior manager of the group confirmed that 35 to 40 workers were laid off at Infinia Chemical.

Previously, the factory provided bus transportation for S Alam Steel (CRM) workers, but this service was stopped for 15 days.

Further, S Alam Steel employees confronted Moshiur Rahman, the general manager (steel) of S Alam Group, over delays in payment of salaries.

S Alam businesses open new bank accounts

After the bank accounts of S Alam Group head Saiful Alam Masud and his companies were frozen, several group companies started opening new accounts in different banks.

Among these, Infinia Composite Textile Ltd, Infinia Spinning Mills Ltd, Infinia Chemicals Ltd, Infinia Synthetic Fiber Ltd, Infinia Knitting & Dyeing Mills Ltd and Univers Enterprise have opened accounts with Dutch Bangla Bank.

An official from Dutch Bangla Bank, on condition of anonymity, said: “At the beginning of September, an official from Infinia approached one of our branches to open an account. After verification, we found that the institutions were part of the S Alam group. so at first we were hesitant, but finally we agreed to open this account to facilitate the payment of employee salaries.

Similarly, several S Alam group companies have also opened new accounts at a branch of Exim Bank, according to a bank official.

Fall of an empire

The once bustling S Alam Bhaban in Asadganj, Chattogram, is now eerily quiet, a stark contrast to just three months ago, when it was buzzing with activity.

Similarly, the residence of S Alam Group chairman Saiful Alam in Sugandha residential area of ​​Chattogram does not receive any visitors. It used to be filled with job seekers, employees and politicians.

On 25 November 2015, S Alam Group took over Ekushey Television with the help of Abdus Sobhan Golap, the then special assistant to Sheikh Hasina. After the fall of the Awami League government on August 5, the former chairman and CEO of Ekushey Television, Abdus Salam, took control of the private channel the same day.

A significant portion of the loans obtained by the S Alam Group from banks was invested in purchasing land. Before August 5, hoardings displaying the group’s name were placed on properties in various districts, including Chattogram and Dhaka. However, after August 5, these signs were removed by the group.