RSRM didn’t live up to the factory reopening declaration

The factory of Ratanpur Steel Re-Rolling Mills (RSRM) Limited remains closed despite its declaration to get back into operation in October last year.

An inspection team of the Dhaka Stock Exchange (DSE) has recently visited the factory in Chattogram to verify its production status but found it shut.

In a visit earlier in April 2021, The Business Standard correspondent found that the RSRM plants were shuttered and its employees remained unpaid. He also made a report on the development.

RSRM Limited, however, did not announce the factory closure as it was price-sensitive information.

Later in September of last year, it explained to the DSE that the company always abided by the securities rules and regulations, it was their lack of knowledge that they could not inform the regulator on time.

The company also said that the process of the MS-Rod manufacturing, consumed huge electricity and this electricity comes from the sub-station, which is nearest to the mill. There was an electrical incident in the sub-station that intensely damaged the system. As a result of the unavailability of electricity, the company could not continue its production in the mill.

The company also said that the equipment of this sub-station was imported from China and was installed by specialised engineers from that country. Due to the Covid-19 pandemic situation all over the world, the process has taken a long time to complete.

But TBS found that the crisis began when the Bangladesh Power Development Board (BPDB) disconnected the power supply to the company's two factories in Chattogram last year for not paying Tk40 crore in outstanding electricity bills. As a result, production at the manufacturing plants was halted.

The company claimed that when the power supply to its factories was cut off, RSRM sought a High Court permission to pay the outstanding bills in installments. The court granted the permission. In August last year, the BPDB restored the power supply to the factories.

It also failed to disburse the declared dividend of 10% cash for fiscal 2019-20 due to a cash crisis.

Its sponsors and directors have secretly sold shares. As a result, their holdings in the company fell from 47.03% to 29.93%. However, the DSE did not announce the share buy-sale of the company's sponsor-directors.

Besides, the Chattogram Orthoreen Adalat in a ruling barred Maksudur Rahman, managing director of RSRM, from leaving the country in connection with a loan default case involving Tk313 crore.

A staggering amount of money from various financial institutions is stuck with Maksudur Rahman.

Apart from Janata, Maksudur took loans from Sonali Bank, Mercantile Bank, Global Islami Bank, Trust Bank, Lanka-Bangla Finance and Prime Finance.

The accused in various cases filed by banks against the RSRM Group are Ratanpur Group MD Maksudur Rahman, Chairman Shamsun Nahar Rahman, their two sons Mizanur Rahman and Marjanur Rahman, brother of the MD, Yunus Bhuiyan, and Modern Steel Mills Chairman Alauddin.

On 5 January this year, the Laldighi Branch of Janata Bank auctioned off the factory and other assets of RSRM Ltd to realise Tk201 crore.

The correspondent called the director of the company Marjanur Rahman several times but he did not answer. Other company officials declined to comment.

In 2014, RSRM Ltd was listed on the bourses. Its stocks dropped by 54% in the last seven months and closed at Tk19.80 on Sunday on the DSE.