Sunday, 29 May, 2022

Bangladeshi RMG exporters sue UK retailer EWM for nonpayment

  • Staff Correspondent
  • 21st April, 2022 10:36:04 PM
  • Print news
Bangladeshi RMG exporters sue UK retailer EWM for nonpayment

Four Bangladeshi RMG companies have sued UK-based apparel retailer Edinburgh Woollen Mill (EWM) for not paying Tk 59.8 million in dues for exported items. 

The four companies are Designtex Knitwear Limited, Designtex Fashions Limited, Knit Bazaar (Pvt) Limited and Bottoms Gallery (Pvt) Limited.

Managing directors of four companies jointly filed a case with Joint District Judge’s Court in Dhaka on March 14 alleging that EWM is trying to evade the payment on the pretext that its subsidiary company Peacock, which imported the products, is bankrupt.

Peacock procured the products from the four companies in Bangladesh one and half years ago before being declared bankrupt. Later, Purepay and Anglo Global reportedly took over the company.

According to the case dossier, Philip Day is the owner of EWM while Peacock, Purepay and Anglo Global are subsidiaries.

 The bank information shows that Philip Day was in possession of Tk 2.67 billion in profit and EWM Tk 12.95 billion as of March 2, 2019. EWM is a group of companies while Purepay and Anglo are its subsidiaries.

The plaintiffs contended that EWM has manoeuvred Peacock into becoming bankrupt with an ill intention to cheat its creditors.

The Edinburgh Woollen Mill (EWM) Dhaka Liaison Office of Peacocks is represented by its Country Head, House: 32A, Road: 02, Sector: 03, Uttara, Dhaka-1230, Bangladesh. 

The case reads: “That, most shockingly, EWM put Peacock in administration for no valid reason and then EWM used 2 of its dormant companies to bring out Peacock from administration and to do this fraudulent venture, first in the beginning of November 2020, EWM Group detached its connections with the defendants no. 4 and 5 i.e. Anglo Global and PurePay and on 16.11.2020, declared Peacock to be in administration and then very cunningly brought Peacock out of administration through the common director Mr. Simpson using the defendant no. 4 and 5 companies creating an innuendo that Peacocks is now owned by completely new companies;”

“That, not only the plaintiffs but also a total of 26 RMG factories have been defrauded in this way who complained to their association Bangladesh Garments Manufacturers & Exporters Association (BGMEA) and the matter had taken very seriously by BGMEA. The immediate past president and the current president both have communicated with EWM and other concerned authorities over email and letters stating this non-payment situation and the matter was also taken up to the Governor of Bangladesh Bank to extend his help in getting the payment. Most fraudulently, the replies and standing of EWM and its subsidiaries was that “Anglo Global is a new company and the historic debt sits with Peacock in administration and EWM” which is a fraudulent as Anglo Global and PurePay are subsidiaries of EWM Group itself and are owned and controlled by the same shareholder/directors i.e. Mr. Philip Day and Mr. Stephen Simpson;” the case added.

Talking to Daily Sun, Barrister Barrister Moinul, counsel for BGMEA, said EWM deliberately turned Peacock into a bankrupt firm to avoid paying dues to exporters.