M/S. Himalaya Cement Ltd. Case [ কেস নং-৫২ ]

M/S. Himalaya Cement Ltd. Case [ কেস নং-৫২ ]

M/S. Himalaya Cement Ltd. Case [ কেস নং-৫২ ]

M/S. Himalaya Cement Ltd. Case [ কেস নং-৫২ ]

Mr. Karim was a Bangladeshi citizen who did his graduation from London and during his stay in London, he was associated with the hotel business with his relatives. He returned to Bangladesh in 1985 with a sizeable amount for setting up of an industrial unit. He submitted a proposal of a cement manufacturing unit to the bank in 1988 seeking a loan of Tk 25.00 crore with the help of some bank official He had some political resilience and he used them to sanction the loan from the bank.

He formed a public Ltd. company with his close associates. The directors of the Company had no experience/knowledge in any industrial concern They were completely dependent on the hired technical as well as managerial personnel.

They opened L/C for procurement of machinery from china and India. But due to lack of technological knowledge the selection of the machinery subsequently appeared to be faulty. The machinery suppliers sent the machinery at the project site which was found imbalanced and improper. The construction work of factory building were also delayed for proper structural design.

M/S. Himalaya Cement Ltd. Case [ কেস নং-৫২ ]

The project went into commercial operation after two years from the scheduled time due to technical difficulties In the meantime. company’s loan liabilities increased to a unsurmountable level. Loan period was 12 year including 3 years grace period. Thereafter the project was operated well and earned profit but the borrower willingly did not make payment as desired and the company was declared a defaulter.

On request of the sponsors the bank rescheduled the overdue loan but the company was again failed to pay the bank dues The bank decide to file a case under insolvency Act 1999 against the borrower company The borrower company current submitted a proposal to the bank for allowing them to go for public offering of shares and increase the capital base.

As senior student of business studies[MBA/M.Com) / as a bank executive analyse the case and find the reason for failure of the enterprise including the following :

Hints for analysis :

1. tack of knowledge of the borrowers about cementp

2. Inefficient Management

3 Diversion of fund to other business.

4 Lack of close monitoring by the bank official

As senior student of business studies) MBA/ M.Com)/ as a bank executive analyse the case and find the reasons for failure of the enterprise including the following

Hints for Analysis :

1. Dealy in the disbursement of bank loan.

2 Lack of monitoring and supervision in the implementation stage.

3 Faulty apprasal.

4 Government policy

M/S. Himalaya Cement Ltd. Case [ কেস নং-৫২ ]

M/S. Super Stave Spinning Mills Ltd. Case [ কেস নং-৫৩ ]

The main sponsor of the project was a contractor who is known as a distributor and a whole sale businessman of a rural area. He was not an educated person but he had experience and vision. At first he stablished a biscuin manufacturing factory with the bank’s financial assistance in 1978, and he had successfully run the project and repaid the bank’s dues in time.

In 1999, he intendered to stablish a cotton spinning project in his local area Khulna. For this he came to the bank and submitted a loan proposal. In 199, the bank sanctioned Tk 12.00 crore for setting up of a cotton spinning project with a production capacity of 10 lac kgs of yarn. The sponsors frmed a public Ltd company with their relations.

They completed the implementation process and started commercial operation in the schedule time in 1993 The bank loan was repayble in 20 half yearly instalment with interest The company has been repaying the loans since incestion. They never failed to pay the bank’s instalment and did not take any replacement and waive facilities from the bank In 1998, the bank was pleased to sanction Tk 30 crore as the BMRE proposal submitted by the sponsor’s to enhance the production capacity to 20 lac kg per year.

Again they have successfully completed the BMRE scheme and started commercial operation of the Project in due time. They are paying bank dues and there is no overdues in their loan accounts. They are one of the good paymaster of the bank and have a good reputation in the banking sector In the meantime. they have developed in their business corporate management system. Their children are well educated and engaged themselves in parental business.

M/S. Himalaya Cement Ltd. Case [ কেস নং-৫২ ]

Thereafter reportedly the family developed about a dozen industrial units which are been run efficiently and earning profit.

As senior student of business studies[MBA/ M.Com] / as a bank executive analyse the case and find the reasons for failure of the enterprise including the following :

Hints for Analysis :

1. Good imtertion.

2. Honesty and sincerity

3. Excellent management capability.

4. Financial strength.

5. Willingness to repay the bank dues.

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