MM Ispahani Ltd established in 1820, the oldest company in Bangladesh, has decided to split its textile and tea garden business by forming two new entities to comply with the requirement of the Bangladesh Bank in availing loans from banks.
MM Ispahani Ltd proposed names for the new entities – Pahartali Textiles Ltd and Neptune Tea Estates Ltd. The business conglomerate has already applied to the High Court (HC) to demerge its business. Earlier, it got approval from its members and creditors as per HC order.
Currently, tea, tea gardens, textiles, foods, agro, ICT, hospitality, energy, packaging, real estate, and shipping businesses are operated under MM Ispahani Ltd. Among them, the businesses of foods, tea trade, agro, ICT, and packaging are operated as subsidiary companies
MM Ispahani proposed names for the new entities – Pahartali Textiles Ltd and Neptune Tea Estates Ltd. An executive of the company said that many businesses under one company caused difficulty in obtaining loans from banks. He said though under the new arrangements companies are different, their management will remain the same. ‘We are not going anywhere and will continue our business here’.
MM Ispahani set up the Pahartali Textile and Hosiery Mills in 1954 with 18,000 spindles. Besides, it started production from the Neptune Tea Garden located in Chattogram in 1960. In 2020, four gardens of Ispahani on 7,885 acres of land produced 4.5 million kilograms of tea.
There are only around 60 countries that have business or industrial establishments which are over 200 years old. In Asia, there are such establishments in seven countries, including Bangladesh. In Bangladesh, it is only the Ispahani family on this list.
According to Bangladesh Bank officials, there is a practice in various sectors of operating multiple units under one company. In this case, entrepreneurs take bank loans under different units of the same company. Then problems arise when a unit defaults on a loan and the name is listed in the Credit Information Bureau (CIB).
A Bangladesh Bank official said a garment unit under the Standard Group recently became a defaulter on a loan, leading the entire group to become a defaulter despite other group units being not defaulters.
Bangladesh’s Ispahani to split its tea and textile business
