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Bangladesh Police Arrest 40 People After Factory Arson

Dec. 2 (Bloomberg) -- Bangladesh police arrested at least 40 people in connection with a fire last week at a factory that makes clothes for retailers Gap Inc. and Inditex SA’s Zara.

The investigation is in progress and more people could be arrested, S.M. Kamruzzaman, an inspector of police, said by phone. Police had blamed a group of arsonists for setting fire to the 10-story building outside the capital Dhaka.

Bangladesh has the second-lowest wages in Asia after Myanmar and cheap labor has spawned a $20 billion garment industry that supplies global retailers. Last month the government raised the minimum wage for the country’s garment workers by 77 percent following a labor dispute that shut factories in an industrial zone on the outskirts of Dhaka.

Last week’s fire at the factory owned by Standard Group, one of the nation’s biggest apparel exporters, was sparked by a rumor surrounding a worker’s death, police constable Muhammad Jasim Uddin said at the time. Standard Group makes clothes for Gap, Zara, American Eagle Outfitters Inc. and Sears Holdings Corp., according to its website.

The arsonists first set fire to packaging materials on the ground floor and the blaze later engulfed other floors, burning machinery and damaging almost 12 billion taka ($154 million) of property, according to the case filed with the police.

To contact the reporters on this story: Arun Devnath in Dhaka at adevnath@bloomberg.net; Adi Narayan in Mumbai at anarayan8@bloomberg.net

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

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