Bangladesh Court Orders Confiscation of Building Owner’s Assets

April 29 (Bloomberg) -- Bloomberg's Haslinda Amin reports on customer response to retailers related to the garment building collapse in Bangladesh where at least 362 people were killed as authorities arrested the building's owner, Sohel Rana. She speaks on Bloomberg Television's "First Up."

A Bangladesh court has asked the government to confiscate assets belonging to the owner of the factory complex that collapsed last week as hopes fade for more survivors after the nation’s biggest industrial disaster.

The property and assets belonging to Sohel Rana, owner of the eight-story Rana Plaza that collapsed killing at least 387 people, as well as of four owners of garment factories in the complex should be seized, High Court judges Mirza Hussain Haider and Muhammad Khurshid Alam Sarkar said in a ruling today in Dhaka. They have also barred transfer of assets held by the five, according to the ruling.

The collapse of the building in Savar last week is at least the third reported industrial accident in the South Asian nation since November, when 112 people died in a fire at a workshop that was producing clothes for companies including Wal-Mart Stores Inc. (WMT) Protesters in and around Dhaka blocked roads and clashed with police last week demanding punishment for Rana, a member of the ruling Awami League political party’s youth wing.

Rescue efforts are continuing and no new survivor was found for a second day, according to the control room supervising the salvage effort. They have pulled 2,437 alive from the rubble. The government hasn’t provided estimates on how many are missing.

Source: AFP via Getty Images

Property owner Sohel Rana, center, is presented at a press conference at the Rapid Action Battalion headquarters in Dhaka on April 28, 2013. Rana was arrested in the western town of Benapole. The police earlier arrested executives of three garment makers housed in the Rana Plaza building. Close

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Source: AFP via Getty Images

Property owner Sohel Rana, center, is presented at a press conference at the Rapid Action Battalion headquarters in Dhaka on April 28, 2013. Rana was arrested in the western town of Benapole. The police earlier arrested executives of three garment makers housed in the Rana Plaza building.

Bangladesh Prime Minister Sheikh Hasina Wajed yesterday visited the disaster site, where hundreds of relatives are still waiting to learn the fate of family members.

Owner Arrest

Building owner Rana, 38, was flown to the capital Dhaka after being arrested in the western border town of Benapole from where he planned to flee into India, Jahangir Kabir Nanak, state minister for local government, told cheering relatives of victims at the disaster site April 28. Police have arrested executives of four apparel makers housed in the building.

After cracks were found in the building April 23, Rana forced workers to return to their posts and said it was safe as it was being checked by engineers, according to Mokhlesur Rahman, director general of the Rapid Action Battalion, an elite law-enforcement agency.

Rana’s wife and father were among the people arrested in connection with the collapsed building. The police have 15 days to interrogate Rana, according to a court order issued yesterday. Anisur Rahman, chairman of Ether Tex, one of the five companies housed in Rana Plaza, turned himself in April 28.

Source:AFP/Getty Images

Cranes operated by Bangladeshi Army personnel are seen at the factory complex following the April 24 collapse in Savar, on the outskirts of Dhaka, on April 29, 2013. Close

Cranes operated by Bangladeshi Army personnel are seen at the factory complex following... Read More

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Source:AFP/Getty Images

Cranes operated by Bangladeshi Army personnel are seen at the factory complex following the April 24 collapse in Savar, on the outskirts of Dhaka, on April 29, 2013.

Worker Protests

About 300 factories employing as many as 500,000 people in the industrial belt of Ashulia, about 10 kilometers (6.2 miles) from Savar, suspended their production today after briefly resuming work in the morning as some workers stormed out calling for safe work environment, Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association, said by telephone.

More than 100 people were killed in a fire in November at a garment factory located in Ashulia, on the outskirts of Dhaka.

In another industrial belt, Gazipur, factories resumed production and are operating smoothly, Munibur Rahman, director of Gazipur Industrial Police, said by telephone.

Hasina on April 26 ordered the arrest of the owners of five factories located in Rana Plaza in Savar, 24 kilometers northwest of Dhaka.

Unmet Standards

Rana’s permit to construct the building, where clothes were made for brands owned by Loblaw Cos. (L) and Associated British Foods Plc (ABF) (ABF), was from the Savar Municipal Corp., a local body that has lower building standards, and not Dhaka’s development authority, said Sheikh Mannan, a planning member of Rajdhani Unnayan Kartripakkha, Dhaka’s development authority.

About half of Bangladesh’s garment factories don’t meet legally-required work-safety standards, said Kalpona Akter, executive director of the Bangladesh Center for Worker Solidarity, a non-governmental organization. A factory collapse in 2005 killed 64 and injured 80 people, according to the Clean Clothes Campaign, which seeks to improve working conditions in the garment and sportswear industries.

Bangladesh’s labor law requires safety measures such as fire extinguishers and easily accessible exits at factories. The government has decided to constitute a panel to identify garment factories in the country at risk of collapse, cabinet secretary Hossain Bhuiyan told reporters yesterday.

$18 Billion Industry

Loblaw (L)’s Joe Fresh and Associated British Foods (ABF)’ Primark, which said that their suppliers made garments at the collapsed factory, both vowed to help improve working conditions in Bangladesh.

Surging wages and inflation in China, the largest apparel supplier, have prompted retailers such as Wal-Mart and Hoffman Estates, Illinois-based Sears Holdings Corp. (SHLD) to shift production to Bangladesh. In response, an $18 billion manufacturing industry has sprung up, marred by factories operated in buildings with poor electrical wiring, an insufficient number of exits and little firefighting equipment.

Textiles contribute more than 10 percent of Bangladesh’s gross domestic product and about 80 percent of the nation’s exports, mainly to the U.S. and the European Union, according to the manufacturers’ association.

To contact the reporter on this story: Arun Devnath in Dhaka at adevnath@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

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