Indian Lilliput fails to pay $5m to Bangladeshi exporters by deadline
A file photo shows workers are busy at a garment factory in Dhaka. Twenty-two apparel exporters are uncertain about getting their payment worth $5 million from India’s Lilliput Kids Wear Ltd against exports as the company had failed to pay the money by the June 30 deadline, exporters told New Age on Saturday. — New Age photo
Twenty-two apparel exporters are uncertain about getting their payment worth $5 million from India’s Lilliput Kids Wear Ltd against exports as the company had failed to pay the money by the June 30 deadline, exporters told New Age on Saturday.
‘The Lilliput offered to pay only 25 per cent of the total payment but the exporters refused it as the offer did not make it clear on how the remaining 75 per cent would be paid,’ said Fazlur Rahman, managing director of Gemini Garments Ltd, one of the 22 exporters.
Exporters were supposed to get their payment in October–November 2011 but Lilliput was delaying the payment and made a commitment to pay it by June 30, he said.
At the last moment, the debt-ridden Lilliput, the largest kidswear brand in India, came out with the proposal by breaching its commitment to make full payment which worried the exporters about the payment, exporters said.
In a proposal to the Bangladesh Garment Exporters and Manufacturers’ Association in the last week of June, Lilliput promised to pay 25 per cent of the total amount saying that the remaining 75 per cent would be adjusted later with further transactions through further business with the exporters.
Exporters rejected the proposal saying that Lilliput’s proposal meant that the company would make their payment after doing business with their money.
‘So it is impossible for the exporters to accept such a vague proposal without any bank-to-bank guarantee for payment,’ Fazlur Rahman said.
BGMEA vice-president Siddiqur Rahman said that an association delegation, headed by its director Arshad Jamal Dipu, was scheduled to go to India on Tuesday and the delegation would take up their demand and complaints against Lilliput with the Indian commerce secretary.
The exporters said that they would file a case with court in India against Lilliput seeking justice and demanding payment if any an amicable solution could not be reached through negotiations.
‘We have already talked with some Indian lawyers about filing a case,’ an exporter said.
They have also appealed to the Bangladesh Bank for blacklisting Lilliput for doing business in Bangladesh.
‘We do not want to lose such a big market like India but we also do not want to face further such fraudulence by any individual dishonest importer,’ said Moin Uddin Ahmed, managing director of Kent Fashion Ltd, one of the 22 exporters.
Exporters feared that they would default on bank loans and would become bankrupt amid shortage of working capital because of non-payment by the Indian company.
‘Banks are showing reluctance at doing business with us and they have stopped giving us banking facilities as we failed to repay loans,’ Fazlur Rahman said.
Lilliput owed Gemini $3.04 lakh which was supposed to be paid in October 2011, he said.
The other exporters are Mazkan Jeans Ltd, Vertex Apparels Ltd, Barat Sweater Ltd, A Plus Sweater, Sinha Fabrics Ltd, Anupam Fashions Ltd, Panshi Knit Pvt Ltd, Annesha Style Ltd, Hypoid Lingeries Ltd, Defoin Design Ltd, New Generation Fashion Ltd, Uttara Woven and Knit Ltd, DNS Sweaters Ltd, Ayesha Enterprise, IP Jack Knitting, T-Mart Computerised Sweater, Hallmark Designwear, Apparel Concept, Alif Garments and ND Apparels.
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