Akij Jute Mills Ltd, a concern of Akij Group, has applied to Bangladesh Bank for taking $20m out of Bangladesh to purchase a Malaysian company that produces items like fireboard and hardboard.
The overseas investment proposal of Akij Jute Mills is the largest so far any company made to the central bank which follows strict rules so that foreign currency does not flow out of the country.
BB officials said Akij Jute Mills applied to the central bank in August, 2016 through Standard Chartered Bank to get the approval to invest $20m from its export retention quota (ERQ) by purchasing the company named Robin Resource Sdn Bhd located in Malaysia.
Akij Jute Mills maintains its ERQ account with Standard Chartered Bank.
The BB started processing the application last month but officials found the application to be ‘confusing’ because of lack of clarity on investment destination.
After receiving the letter, the central bank on August 21 sought some clarifications about the cross-boundary investment proposal of Akij Jute Mills.
The company replied to the BB queries on September 8, 2016. On October 19, 2016, Akij Jute Mills wrote a letter to finance minister AMA Muhith requesting him to make a recommendation to the central bank in favour of its proposal.
Akij Jute Mills would like to set up a company in Singapore by acquiring a holding company in Singapore namely Robina Resources Pte Ltd which has two manufacturing plants in Malaysia — Robin Resources Sdn Bhd and Robina Flooring Sdn Bhd, the
letter said.
These two companies are producing a wide range of medium-density fibreboard, hardboard and laminate flooring products. Robin Resources Sdn Bhd and Robina Flooring Sdn Bhd were incorporated and started their production in 1984 and 2000 respectively in Malaysia.