M/S. Rana Paper Mills Ltd. Case [ কেস নং- ৬০ ]

M/S. Rana Paper Mills Ltd. Case [ কেস নং- ৬০ ]

M/S. Rana Paper Mills Ltd. Case [ কেস নং- ৬০ ]

M/S. Rana Paper Mills Ltd. Case [ কেস নং- ৬০ ]

The main sponsor of the project, Mr. Rana completed Masters in Economics from Dhaka University He was engaged in import of drugs and medicines and a dealer of Dhaka Stock Exchange (as a member). One of his friends was a chemical engineer and who inspired Mr Rana to set up a Paper Mill. Accordingly. Mr. Rana: proposed to the bank for extending financial facilities to set up the simplex board manufacturing unit with a production capacity of 10 Ton/day.

The bank sanctioned a loan of Tk 1.50 crore in 1982 and opened L/C for import of machinery in 1985. But due to dishonesty of suppliers and sponsors, the machinery could not reach in the project site in time. Rather the machinery was supplied in 1993 but they could not installe the machinery till 1994 Besides, if was found that the machnery was old and inoperative. But again the bank sanctioned Tk. 0.50 lac as additional loan to start up the project.

The sponsors procured additional machinery for diversification of the product ie duplex board instead of simplex Board. By this time, the total outstanding loan mounted up to Tk 15.00 crore which was impossible to be repaid by them As per sponsors proposal, bank waived the total accumulated interest of Tk. 12.50 crore and balance principal amount was kept into interest free block account. The bank also approved working capital loan of Tk 50.00 lacs.

In the meantime, the main sponsor died and his son took over the management. The new management had tried to run the project but they have failed to manage it. Presently, the project has become stuck up/sick.

M/S. Rana Paper Mills Ltd. Case [ কেস নং- ৬০ ]

As a senior student of business studies[ MBA/M.Com | or as a bank executive. analyse the case to find the extent of the following reasons for sickness of the enterprise

1.Management incapability

2. Inexperience in the line of business.

3. Dishonesty of the sponsors.

M/S. Doctors Sweaters Ltd. Case [ কেস নং- ৬১ ]

Dr. Zaman and his three associates were born in different educated and rich families in Bangladesh. They completed their graduation in Bangladesh and joined in Govt. Hospital as Medical Officers in 1980. In 1982. they were offered an oportunity for betterment of their carrier and to earn money. They accepted the offer given by Saudi Arabia Govt. and joined there. They surved about 10 years in Saudi Arabia and returned to Bangladesh with a sizeable amount.

There were good relationship among themselves in Saudi Arabia and when came back to Bangladesh they were trying to do someting in honesty way. They discussed with banker friends to decide line of busnessmen and the possibility of bank finance. Some of them opined that being doctors they should angage themselves in their line of experience. But the doctors were not much interested in their profession because of the bad environment of the profession.

M/S. Rana Paper Mills Ltd. Case [ কেস নং- ৬০ ]

Then they decided to start export business. They had a good connections in the European and American market. They submitted a propisal for producing export oriented quality sweater The bank appraised the proposal with special care and sanctioned Tk. 70.00 lac in 1974 to set up a sweater manufacturing unit with a capacity of 60,000 dozens per year in a rented preminse. They offered collateral as security to the bank.

They imported machinery and installed the same in due time and started commercial operation in 1995. The loan was repayable in 10 half-yearly installments. The borrower was operating the unit at the desired level and exported their products with good reputation. In the meantime, they expanded the unit with an additional capacity of 60,000 dozens per year from their own equity which was earnd from their business Simultaneously, they were paying bank’s dues regularly.

The Bank is highly satisfied on their dealings and offered them after further financing in existing unit or way new business but the borrowers did not show their interest in this regard. Presently, they are one of the largest exporters of Garments Sweater in the banking.

As a senior student of business studies[ MBA/ M.Com] or as a bank executive, analyses the case to find the positive sides and negatives, if any, of the enterprise including the following

1.Efficient Management

2. Availability of capital/Fund

3. Willingness to repay, and

4. Honesty of the borroness.

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