Rise and fall of the Elias brothers
Gentlemen Elias Brothers, better known as MEB, became one of Bangladesh’s leading industrial conglomerates in the 1990s and was the darling of banks and financial institutions.
But its fall from grace was equally remarkable, showing how a healthy business can fail due to a lack of foresight from its owners, futile political ambitions, and a heap of debt.
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The company’s journey began after Mohammad Elias started trading in commodities in the 1950s, a decade after he passed his eighth year.
He gained basic business knowledge by running the business in Chaktai-Khatunganj Market in Chattogram Town, the largest consumer goods wholesale center in Bangladesh, located near his hometown of Bakolia.
In 1962, at the age of 25, he founded the MEB trading company with his older brother Ahmed Hussain.
Initially, the concentration of MEB was in consumer goods. Gradually it spread to areas such as galvanized sheet metal, ship demolition, agro-industry, sheet glass, soybean oil, beverages, paper, cardboard, clothing and brickyards.
The investment in business came from the profits it made as Elias always preferred cash transactions to bank loans in order to import goods and grow.
Its footprint has grown dramatically: MEB alone controlled around 15-20% of the country’s commodities market in the 1990s. It had also been the sole distributor of British manufacturing company Lever Brothers for nearly three decades after independence.
But the course of the group took a turn in the wrong direction when Elias passed away on April 29, 1997.
His son Shamsul Alam and his niece Nurul Absar, also son of Ahmed Hussain, took over the general management and chairmanship of the group respectively.
The companies were divided among the heirs. The third generation got involved after 2005. But they have not been able to reclaim the market position that MEB once occupied.
Alam’s involvement in politics in 2008 took its toll on the family business.
After failing to secure the Awami League nomination in the 2008 parliamentary elections, he joined the BNP and became the vice president of the city unit.
It was at this point that the condition of the group began to deteriorate, with the owners losing their focus, traders said. It even withdrew from commodity trading, its core business until 2009-10.
Elias had created half a dozen companies, but only three are in operation today. The others were either closed or non-operational due to financial constraints, lack of experience of successors and family disputes.
MEB, whose founder didn’t rely on loans to fuel growth in its early days, is currently on the Top 100 list of defaults.
At present, the group’s bad debts amount to Tk 938 crore with 17 banks and financial institutions.
He owes Tk 280 crore to Agrani Bank, Tk 183 crore to the National Bank, Tk 83 crore to the South East Bank, Tk 73 crore to Eastern Bank and Tk 63 crore to Islami Bank.
Another Tk 62 crore is due to AB Bank, Tk 55 crore to Mercantile Bank, Tk 55 crore to City Bank, Tk 39 crore to Bank Asia, Tk 30 crore to One Bank, Tk 24 crore to Standard Bank and Tk 18 crore to Shahjalal Islami Bank.
In the past, a much sought-after client has become the bane of the banking industry.
More than 20 cases have been filed in the Chattogram Money Loan Court by several banks against the group’s senior management.
In three of these cases, arrest warrants were issued on behalf of five senior company officials.
Several banks and financial institutions have been used to provide large sums of money in the form of loans against nominal collateral due to its reputation. The loans created major problems for the banks.
The third generation has been trying to invest in new areas for a few years, but no lender is ready to give more loans.
On September 20, a Chattogram court issued arrest warrants against five owners of the MEB group in a case filed for the embezzlement of Tk 183 crore from the Khatunganj branch of the National Bank.
They are Alam, Absar, directors Mohammad Nurul Alam, Kamrun Nahar Begum, wife of Shamsul Alam, and Tahmina Begum, wife of Absar.
On June 23, the court issued arrest warrants against the five people in a case filed by the Bank of the Southeast.
Shafiqul Islam Chowdhury, legal adviser to the National Bank, said the private commercial bank lent 102 crore Tk in 2008, although 50 kathas of land worth 1 crore Tk were put as collateral, thanks to its reputation. commercial.
The company paid a few installments. In 2014, the National Bank filed a lawsuit against homeowners in the cash lending court after they stopped paying installments.
According to Chowdhury, the managing director and a director of the MEB met with senior officials of the bank and asked them to extend the term of the loans by 15 years. But they did not agree to pay 5 percent of the loans as a down payment according to the laws.
“So it was not possible for us to reschedule the loans.”
Shamsul Alam and Absar could not be reached for comment.