The assets, land, and machinery pledged as collateral of the stock market-listed Emerald Oil Industries are once again up for auction by state-owned lender BASIC Bank Limited following multiple attempts to collect the debt.

Emerald Oil’s assets have at least three prior auction calls, according to sources at BASIC Bank. However, because the bids fell short of the bank’s expectations, the auction was canceled.

Currently, BASIC Bank is attempting to hold a new auction. On July 30 of last year, the organization was given permission to seize and sell Emerald Oil’s assets in order to recoup the debt under Section 33(5) of the Money Loan Court Act, 2003.

On February 1, an auction notice inviting bids was published. The bids were to be placed by February 25.

The auction notice states that as of February 12, 2018, BASIC Bank has claimed an unpaid balance of Tk 91.95 crore. If qualified bidders are found, 541 percent of the land will be put up for auction, along with domestic and foreign equipment.

The assets of the company were previously put up for auction under a court order, Sheikh Jalal Md. Khalid bin Hafiz, assistant general manager of BASIC Bank’s special asset management unit, told the media. However, because they did not sell for the desired price, they remained unsold.

He also mentioned that the new auction notice is a part of the company’s efforts to get back the loans that were given to it. Until the loan is paid back in full, the property may be seized and sold with permission from the money lending court.

The BASIC Bank official added, “If the property remains unsold, we will apply to the court to determine the next course of action. Future steps will be taken as per the court’s instructions.”

Regarding the change in ownership of the company, he clarified, “The Bangladesh Securities and Exchange Commission (BSEC) has appointed an institution to manage the company. But the new owner has not settled the outstanding loans. As per the court order, the property mortgaged against the bank’s loan will be auctioned.”

Minori Bangladesh, a subsidiary of Japanese agricultural company Minori Co. Ltd., took over oil producer Emerald Oil in 2021. Emerald Oil returned to production in January 2022 with fresh investment from the new owner.

Company loans, lawsuits and defendants

Emerald Oil Industries, formerly Emerald Oil and Poultry Industries, had taken loans from BASIC Bank to expand its business by mortgaging its land and factories in Sherpur and Jamalpur. When the loan failed to repay, the lender filed a case in the money lending court in 2017.

According to BASIC Bank documents, the defendants in the case included the company’s former managing director Syed Hasibul Gani Ghalib, former chairman Syed Monowarul Islam, former directors Sajan Kumar Basak and Amitabh Bhowmik, and Liaquat Ali and Syed Mahbubul Gani.

In the auction notice, the bank said the mortgaged land and machinery would be auctioned and the shares of Emerald Oil’s directors and others had already been seized.

Not only Basic Bank, but its other lenders Bank Asia, Prime Finance and Investment and Midas Finance have also filed cases against Emerald Oil to recover their loans.

According to Emerald Oil’s financial statements, the total debt as of December 2023 was Tk 130 crore. Of this, Bank Asia’s Tk 262.9 crore, Prime Finance’s Tk 73.3 crore and Midas Finance’s Tk 243.6 crore.

Production suspended

After Emerald Oil’s production was suspended for more than six months, the Dhaka Stock Exchange (DSE) downgraded Emerald Oil Industries to Z category in December 2024.

In November, the company informed the DSE that the company’s factory production has been suspended since January 1, 2024 due to severe shortage of gas supply.

Listing on the stock market

In 2014, Emerald Oil was listed on the stock exchange after raising Tk 20 crore through an initial public offering from the stock market.

Emerald Oil was a profitable company until 2016, producing rice bran edible oil known as Spandan.

The following year, in 2017, the company’s loan scandal came to light. Since then, the company started making losses and operations were shut down due to a shortage of working capital.

The company’s founders fled the country after facing corruption allegations.

In 2021, Minori Bangladesh acquired the company by buying 7.81 percent shares from the secondary market. It then invested funds to restart the factory. But now the company’s future is once again heading towards uncertainty due to non-investment as promised.