Flouting the conditions of contracts between the government and the workers and employees of state-owned Karilin Silk Mills in Chittagong, a large piece of land of the mill was illegally sold by a workers’ leader to Bangladesh Steel Re-Rolling Mills Ltd (BSRM) through forgery. Sprawling on 2.69 acres of land alongside Dhaka-Chittagong Highway in Fauzdarhat Industrial Area, the mill was illegally sold to BSRM, Bangladesh’s one of the leading steelmakers, in November 2010 at Tk 17.34 crore. But industry insiders say the price of the land would be over Tk 100 crore.
As per the gazette notification of the Ministry of Textiles and Jute and condition of the handover deed between the government and the workers and employees, there is no provision to sell or buy the mill.
What’s more, it is alleged that the mill has been sold to BSRM with government shares. A total of 7,900 shares were issued to Karilin Silk Mills, which was later renamed as Modern Karilin Silk Mills Ltd, where 2,000 shares were in the hands of the government.
Former Deputy Secretary, Ministry of Textiles and Jute, Saifuddin Ahamed Mazumder’s written statement to the first Joint Judge Court in Chittagong says, “The mill was sold to BSRM with 2,000 government shares. Mohammad Ishaque, a workers’ leader, is not authorised to hand it over or sell it to anyone.”
When contacted, State Minister for Textiles and Jute Mirza Azam said, “The mill was sold to BSRM, completely violating the agreement and disobeying the laws. Our ministry has decided to reclaim the mill. The process of reclamation is underway.”
However, when contacted, BSRM Executive Director Tapan Sengupta said, “We bought the land after paying government taxes by registration. We did not violate any rule. I don’t know about any gazette notifications.”
“The seller will know about it and you can understand after talking to the seller of the property. I have bought the land seeing deed and mutation. We did not buy any factory. We bought empty land,” added Sengupta.
Meanwhile, a case lodged by directors of Karilin Silk Mills remains pending with the High Court. Mohammad Jafar, one of the directors of the mill, said, “With fake documents, Ishaque (workers’ leader) sold the mill to BSRM illegally.”
Jafar said that 35 other directors came up with the same allegation and lodged the case.
Ishaque, chairman of the Board of Directors and leader of workers and employees, went into hiding after selling the mill, deceiving other mill directors as well as the government.
Machinery worth about Tk 5 crore, as estimated by the directors, and infrastructure have disappeared from the mill premises. BSRM authorities have taken over the entire area and have placed it under special surveillance.  Allegedly, the BSRM authorities have demolished infrastructure to expand establishments.
Upon visiting the site, this correspondent found no Karilin machinery or infrastructure. Rather, the entire area has been taken over by BSRM, complete with boundary walls with barbed wires. Further, CCTV cameras have been installed and no one is permitted to enter the area except BSRM employees. BSRM sources said they are currently using the land as a warehouse.
Karilin Silk Mills was handed over free-of-cost by the government to the Board comprising permanent employees and workers of the mill on June 13, 2010 in a bid to save jobs and make it a profitable enterprise as it had been a loss-making enterprise till then. However, instead of operating the mill efficiently, Ishaque fraudulently sold the mill to BSRM.
When contacted by The Independent, Secretary of Bangladesh Textile Mills Corporation (BTMC) Md Yousuf Ali said, “The government handed over the mill to workers and employees to continue operations. However, breaching conditions, the mill was sold to a third-party.”
Apparently, Ishaque transferred all the shares of the mill to himself by manipulating and fabricating the directors’ signatures.
While Jafar’s signature shows up in the sale deed as witness, he claimed that he did not sign any such deed and his signature was forged. A case has been lodged with a Chittagong Court, challenging sale of the mill where shareholders have said that they did not transfer any shares to Ishaque. All 35 mill directors have designated Jafar to plead on their behalf.
As far as contract law goes, Section 11 of the gazette notification of the Ministry of Textiles and Jute published in March 2002, concerning sale of nine state-owned silk mills, says, “The Board of Directors comprises permanent workers and employees. They cannot hand over ownership of the mill to any individual or institution or third party under any circumstance.”
It also says that moveable and immoveable property of the mill cannot be sold to any third party. If workers and employees breach any condition of the agreement, the government can take over ownership of the factory any time.
Whereas Section 10 says that no other commercial activity can continue in the mill if the Board of Directors violates rules and conditions of the mill hand-over agreement and the government can cancel the agreement signed with the workers and employees and re-acquire ownership of the mill.
In the meantime, BSRM is allegedly trying to take over the mill land while general workers have lodged a complaint with the Additional Divisional Commissioner of Chittagong Division. BSRM’s earlier application too was rejected by Assistant Commissioner (Land), Sitakunda, on February 5, 2014, as it was found that the mill has been handed over to workers and employees and is a state-owned institution, and that there is no policy to sell it.
BTMC has taken an opinion on the matter from the Ministry of Law, Justice and Parliamentary Affairs on December 12, 2011, which says, “Though the property is owned by Modern Karilin Silk Mills Ltd, it seems that no step was taken as per law as the approval of the Board of Directors of the mill was not taken prior to sale.” Back in 1964, Karilin Silk Mills was established in the Fauzdarhat Industrial Area. The mill went into commercial production two years after its inception.