A group of readymade garment exporters on Saturday issued a warning to Expo Freight Limited, a freight forwarding company, saying that they would file a lawsuit if the company fails to pay $10.21 million in outstanding arrears within the next 15 days.
EFL is legally bound to pay the arrears to local suppliers, as it handled the goods supplied to the now-bankrupt British retailer Debenhams, the exporters said at a press conference held at the Economic Reporters鈥� Forum in the capital Dhaka.
A total of 36 manufacturers supplied readymade garments to Debenhams PLC, a UK-based company with a 150-year history, under contracts that required them to submit the bill of lading to EFL for payment upon receiving export proceeds.
Bangladeshi apparel exporters have adhered to these terms for over a decade.
However, on April 9, 2020, Debenhams entered liquidation, appointing an administrator to manage the process.
At the press conference, Debenhams Vendors Community convener Md Zahangir Alam said that EFL and its carriers delivered goods to Debenhams without the necessary bank endorsement, violating the Bangladesh Bank鈥檚 foreign exchange policy.
The vendors subsequently issued legal notices to EFL, Debenhams鈥� nominated forwarder, and their carriers 鈥� including Maersk Line, Hapag-Lloyd, GBX, BLPL, TPL and Sky Ways Limited 鈥� seeking payment, he said.
After these notices, Maersk Line and EFL engaged with the Debenhams Vendors Community and agreed to pay 70 per cent of the FOB values for the goods transported by Maersk Line.
Zahangir, also the managing director of Design and Source, said that local suppliers delivered garments valued at $70 million to Debenhams, which was significantly affected by the COVID pandemic, prior to the retailer鈥檚 bankruptcy.
Of the amount, nearly $60 million has been received over the past four years, leaving $10 million still outstanding.
He observed that many of the 36 suppliers, whose total export value exceeds $5 billion annually, were small and medium-sized enterprises that lack the financial resilience to absorb these losses.
鈥楢s a result of multiple extensions from the Bangladesh Bank, all back-to-back LCs have matured, and some authorised dealer banks have resorted to loans to pay suppliers. Furthermore, banks have halted the opening of new back-to-back LCs, depriving factories of essential facilities such as Export Development Fund benefits and cash incentives due to overdue payments,鈥� Zahangir said.
Currently, many factories are struggling to meet payroll obligations, leading to worker unrest, he said.
Zahangir urged the Bangladesh Bank and the National Board of Revenue to intervene, saying that if payments were not received within 15 days, the factories would be unable to pay their workers, potentially resulting in protests.
A&A Trouser Ltd managing director Md Mahbubul Alam also spoke at the press conference.