AWR Developments’ rejoinder and our reply
In response to the report titled “How UCB loans were given to ineligible firms,” published by The Business Standard on 27 August, AWR Developments Limited, a United Commercial Bank (UCB) client, has issued a rejoinder.
In the rejoinder, AWR Developments says the report asserts that UCB’s Karwan Bazar branch granted a “staggering Tk400 crore loan to AWR Developments (BD) against a work order valued at Tk600 crore” and that the “work order was eventually cancelled due to significant deficiencies, including a lack of experience and proper equipment.”
“This statement is absolutely incorrect because AWR has never received any single work order for dredging with a value of Tk600 crore, nor has any work order of such value been cancelled. There is no factual basis for this claim, and it appears that no effort was made by your reporter to verify the information before publishing it.
“In order to defame our shareholders, the insinuation that AWR was given favourable treatment and avoided standard banking practices by releasing 70% of the loan amount upfront, is completely false and fabricated. In actual fact, the loan was disbursed in phases, upon submission of adequate work completion documents,” the rejoinder says.
It adds, “The allegation that ‘work order was cancelled due to significant deficiencies, including a lack of experience and proper equipment’ is also untrue and misrepresentation of facts. In actual fact, AWR has completed the task successfully and delivered in accordance with the terms and conditions of the work order.
“Your report also asserted that we have not repaid the loans. We vehemently object to such an assertion and confirm that the current outstanding liability stands at Tk32.09 crore, after adjusting the majority of the loan amount, with the validity of this loan still intact.
“Your reporter wrongly asserted that the AWR is owned by Mohammed Adnan Imam. While Mr Imam is one of the shareholders, AWR is incorporated as a limited liability company with multiple shareholders.”
Our reply
TBS has obtained a letter from the Naval Headquarters dated 11 July 2021. It mentions, “The project to dredge 83 rivers and canals in Bagerhat district, undertaken by the Bangladesh Navy and the Bangladesh Water Development Board (BWDB), had an estimated cost of Tk531 crore.”
Within 12 months of the project (by June 2019), the BWDB unilaterally cancelled the work on 37 out of the 83 rivers and canals, citing a lack of progress. This decision was made while 24 months of the project still remained.
The letter further stated, “Although the mentioned project was valued at Tk531 crore, in reality, it was not possible to find or excavate the required amount of earth. This was the main reason for the slow progress of the work by the Bangladesh Navy. Eventually, the Navy was able to complete work worth only Tk118 crore.”
We have confirmed through the bank’s acting managing director Syed Faridul Islam that AWR Developments received a loan approval of Tk515 crore from UCB for this project. However, UCB disbursed only Tk70 crore to the client, which is just 13.58% of the work order’s value. The remaining loan was not released as most of the project was cancelled by the Bangladesh Water Development Board. In the letter, the Navy mentioned that they were not consulted during this cancellation process.
Our report mentioned that AWR Developments had initially received a loan of Tk400 crore for the project, most of which remained unpaid. This information was incorrect. As of now, the client has only Tk32 crore outstanding under the mentioned work order.
According to bank documents, the current outstanding loans of AWR Developments with UCB amount to Tk538 crore, while AWR Real Estate owes Tk108 crore. The total loan amount for both companies stands at Tk646 crore.
Out of the total, AWR Developments has an overdue funded amount of Tk186 crore, while AWR Real Estate has an overdue funded amount of Tk63.86 crore.
According to Form XII dated 13 August 2023, the board of directors of AWR Developments includes Mohammed Adnan Imam as Chairman, Chowdhury Fazle Imam as Director, and Nilofar Imam as Director. Among them, Chairman Adnan Imam holds 45% of the shares. However, the shareholding details of the other two directors are not available to us.
Also, in AWR Real Estate Ltd, Mohammed Adnan Imam serves as chairman and Chowdhury Fazle Imam as director. The chairman holds 50% of the shares, but the shareholding details of the other director are not available to us.
We regret the mistakes in our report.
