Thermax Group, owned by Abdul Kadir Molla, ranks among the top defaulters in Bangladesh's banking sector. The group owes approximately 8,000 crore taka to 12 commercial banks, including state-owned Sonali, Janata, Agrani, and Rupali.
The debt continues to grow annually due to massive interest, posing a significant burden on government banks.
Experts in the banking sector believe this trend signals trouble for private banks as well.
It is known that in 1997, Abdul Kadir Molla began his business dealings with the bank by importing capital machinery worth 92 lakh taka from Sonali Bank to set up a ready-made garment factory.
As of October 2024, the Thermax Group owes around 1,500 crore taka to six institutions, all of which have been classified as defaulted since September 30. The group has shown no interest in repaying this loan, according to the bank's authorities.
Molla has managed to stay afloat by exploiting legal loopholes and using the court system to keep his CIB (Credit Information Bureau) record clean. Banking officials, however, do not see this as a sustainable solution.
They believe that the company must shift towards commercially viable operations to survive. Bank officials from Rupali, Sonali, and Janata banks have stated that if the company fails to become financially viable, the banks will have no choice but to seek alternative means of loan recovery.
Some bankers say that despite offering numerous concessions, Thermax has failed to honour its obligations. They argue that government banks have incurred significant losses due to the board of directors and management violating rules and offering the company excessive opportunities. As a result, loan recovery has become increasingly uncertain, and the responsible officials of the banks cannot escape accountability.
Moreover, Abdul Kadir Molla has maintained favourable relationships with two successive governors of Bangladesh Bank, who facilitated the regularization of his loans. Many believe the undue intervention of these two governors has put the lending banks at risk.
After completing his SSC, Abdul Kadir Molla left for Singapore to work in a shipyard. Upon returning to Bangladesh, he joined Titas Gas Transmission and Distribution Company in 1985.
After 12 years, he voluntarily retired in 1997.
During his tenure at Titas Gas, some claim he amassed significant wealth through irregularities and corruption.
In February 2008, several newspapers, including the Daily Star, reported that the Task Force had discovered assets worth 21 billion taka under his name.
However, the investigation was mysteriously halted, and the issue became a topic of national discussion.
It is said that Molla's rapid accumulation of wealth during his 12 years at Titas Gas raised suspicions.
After leaving Titas in 1997, he ventured into industrial entrepreneurship.
Over the next decade, Thermax Group grew, now managing 16 industrial enterprises.
Molla has served as a director of an insurance company and a director and chairman of SBEC Bank.
Loans and Defaults
As of now, the total amount of loans taken by the Thermax Group from various banks is about 8,000 crore taka. Around 4,000 crore taka of this debt is owed to state-owned Sonali, Janata, Agrani, and Rupali banks.
The group has also taken loans from several other domestic and foreign banks, including Al-Arafah Islami Bank, Social Islami Bank, Islami Bank Bangladesh PLC, United Commercial Bank (UCB), Dutch-Bangla Bank, and Bank Asia.
According to the amended Bank Companies Act (2023), customers who do not repay loans despite having the means to do so are classified as willful defaulters. This also applies to those who provide false information or use the loan money for unintended purposes.
Abdul Kadir Molla’s actions suggest he fits this category. Despite claiming to allocate 25% of his income to public welfare and education, it remains unclear how he manages such expenditures if his business is not performing at a high level.
Many have labelled him a willful defaulter due to this inconsistency.
Currently, Thermax Group is not repaying a significant portion of its liabilities to Sonali Bank. The group has requested loan renewals without making any down payments, but Sonali Bank has rejected the second application.
The group has also filed a writ petition to keep its CIB record unclassified, which, as of the latest court order, has prevented Sonali Bank from classifying six of Thermax’s institutions as defaulted.
Legal Loopholes and Political Influence
The Bank Companies Act prohibits defaulters from becoming directors of banks. However, despite being a defaulter, Abdul Kadir Molla managed to become a director and Chairman of South Bangla Agriculture Bank (SBAC) through a High Court stay order.
An investigation by Bangladesh Bank found that Thermax Group had progressed steadily during its first decade, with bank loans and business turnover growing in parallel. By 2015, the group's loans totaled under 3,000 crore taka, with a turnover of about 3,500 crore taka.
However, in the following five years, the group’s loans doubled without a proportional increase in turnover. Instead, it struggled, particularly after investing large sums into textiles and yarn. Loan installments became irregular, and by recent years, nearly all loans had defaulted.
The COVID-19 pandemic, however, provided a temporary reprieve for Thermax. Bangladesh Bank relaxed loan repayment obligations, which Molla capitalized on, receiving additional incentives worth 200 crore taka from both public and private banks.
Bankers' Concerns and Future Outlook
Top executives of banks that have lent to Thermax Group now find themselves trapped in a quagmire. Despite multiple efforts, recovering money from the group has proven impossible, and interest on the loans continues to accumulate. Sonali Bank, for example, faces a significant risk due to its exposure to Thermax.
Janata, Agrani, and Rupali banks have also incurred large debts, with loans totaling several billion taka. These debts are growing due to unpaid installments. The banks are under immense pressure to resolve the situation but are struggling to take effective action.
Private banks have not been immune to the crisis either. Due to political pressure, loans to Thermax have been rescheduled multiple times, and interest continues to accumulate. However, executives from these banks have expressed their concerns privately, reluctant to speak out publicly.
A senior executive of a large private bank stated, “I’ve been dealing with the Thermax loan for five years. Abdul Kadir Molla only repays when he’s cornered, exploiting every opportunity, especially during the pandemic.”
Another executive noted, “Molla often claims he did not need loans to establish his companies. But how did he fund these ventures? He diverted capital from one organization to another, which has only worsened the situation.”
Many government banks have stopped offering new loans to Thermax Group, while private banks are following suit. Executives from both sectors have acknowledged that Molla’s businesses have not experienced any operational disruptions.
Yet, he refuses to repay his loans. This situation paints a clear picture of Molla as a willful defaulter, and many believe it is time to take decisive action against him.
When asked about his CSR activities, a banker, speaking anonymously, remarked, “It’s like robbing a bank at night and making generous donations during the day. It’s nothing more than a facade.”
Despite repeated attempts to contact Abdul Kadir Molla for comment, his phone remained switched off, and he did not respond to further calls.