The High Court has emphasised that the recovery of ‘questionable’ defaulted loans of the Beximco Group must be ensured within the legal framework, while maintaining discipline in the banking sector.

The court directed the Bangladesh Bank and other authorities to take legal action against those responsible for approving ‘questionable loans’ to the group during the 15-year authoritarian rule of Awami League government.

It also ordered Bangladesh Bank, the Bangladesh Financial Intelligence Unit, and other agencies to  complete investigations undertaken by the interim government and take action if wrongdoing is found.

The bench of Justices Farah Mahbub, who is now an Appellate Division judge, and Debasish Roy Chowdhury delivered the short verdict on March 12, 2025, while the full judgment was released in March 2026.

The court allowed Beximco companies to continue operations under strict monitoring, considering the interests of thousands of workers and employees.

The case originated from a writ petition filed in 2024 by Supreme Court lawyer Masood R Sobhan, who sought the appointment of a receiver to run the companies over alleged loan irregularities.

The court observed that when a matter involving public interest and possible public harm is brought before it, justice cannot be denied simply due to procedural defects in the petition.

According to court findings, the group’s total outstanding loans stood at about Tk 48,150 crore as of September 30, 2024, with over Tk 22,500 crore classified as defaulted. Total liabilities exceeded Tk 49,000 crore.

The court noted that multiple banks and financial institutions were exposed to the group. The Bangladesh Bank identified up to 188 entities, including 169 companies, linked to Beximco.

Earlier, the Bangladesh Bank had instructed banks not to allow transfer of mortgaged properties of Beximco companies. It also appointed a receiver in November 2024.

The court ruled that the appointment of the receiver, made under its interim order and not overturned by the Appellate Division (except for Beximco Pharmaceuticals Ltd), was lawful under the ‘doctrine of necessity,’ which prioritises public welfare.

The court further said that the appointment of a receiver in the Beximco case was not made strictly under existing laws, rules, or regulations of the Bangladesh Bank. However, given the urgent situation involving huge loans — about Tk 53,000 crore with over Tk 23,120 crore already defaulted — the step was necessary.

It further said that all actions taken in good faith by the receiver to protect public funds were valid. These included managing loans given beyond approved limits, handling defaulted and at-risk loans, and preventing illegal transfer of assets of Beximco companies.

However, the court emphasised that Beximco Group must now operate strictly within the bounds of the law, under constant monitoring by the Bangladesh Bank and other regulatory bodies.

The court said that the Bangladesh Bank and commercial banks had ‘miserably failed’ to perform their legal duties in sanctioning and recovering loans, warning that such failures could harm the public.

The lawyer in the writ petition argued that Beximco Pharmaceuticals Ltd took loans of over Tk 5,000 crore from different banks but failed to repay them.

Instead, the company allegedly secured a finance ministry notification giving special relief, allowing large borrowers owing more than Tk 5,000 crore to repay any amount they chose after a certain period.

The lawyer further claimed that the Beximco Group had taken about Tk 22,000 crore in loans from a scheduled bank, but made no repayment.