A Canadian buyer has asked a Bangladeshi supplier to refund the money it has paid against a work order for surgical masks, officials said.
The buyer has alleged that the local buying house Moontaha Sourcing Limited and Silverene Apparel supplied 'substandard' masks worth US$10 million to the Canadian company, Busrel Inc.
Busrel Medical, a subsidiary of Busrel Inc., is the official supplier of PPE (personal protective equipment) for Covid-19 for the governments (provincial) of Quebec and Alberta, sources said.
The Canadian company complained that only about 5.0 per cent of the ordered masks arrived in Canada, and that the shipped goods were rejected by Busrel, hospitals and Canadian authorities concerned on the ground that the products were sub-standard and non-medical.
Busrel wanted the owners of the Bangladeshi companies to refund the money while the Bangladeshi companies were insisting that Busrel must continue to buy masks from them, according to an official communication.
As a result, a commercial dispute has arisen between the companies of the two countries for last two months, it added.
The Canadian buyer has sought intervention by the government and trade bodies concerned to resolve the legal dispute so that they get back the money, officials added.
Canadian High Commission in Bangladesh has recently written to the commerce ministry, raising the allegation that Bangladeshi companies did not make the shipment worth US$10 million in line with the orders placed by Busrel Medical.
After getting the allegation, the commerce ministry asked the Export Promotion Bureau (EPB) to look into the issue, they added.
When asked, EPB vice chairman AHM Ahasan said a committee has been formed two weeks back and they are yet to get the committee's feedback.
"The committee is working on the issue and we hope to get their report within two or three days," he told the FE on Saturday.
Meantime, the EPB also wrote to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Garment Buying House Association (BGBA) in this regard.
BGBA president Kazi Iftekhar Hossain in a letter to EPB on July 19 said that the alleged Bangladeshi companies are not members of the association.
He expressed concern over the involvement of local garment companies in not-supplying surgical masks as promised.
"Such unethical activities are tarnishing the image of the local textile and readymade garment industry, and those will have a long-term negative impact," he noted in the letter.
Though it is mandatory for all buying houses and RMG factories to be registered with the Department of Textile in accordance with the textile law, many buying houses are doing business in the country violating the law, he added.
When asked, BGMEA president Dr Rubana Huq said BGMEA held virtual meetings with the supplier factory that is a member of the trade body and the Canadian buyer where representatives from the government, Canadian High Commission, and banks involved were present.
"We are now waiting for the EPB report," she said, adding that the supplier companies have agreed to refund the money.
When asked, Md Shahadat, owner of Moontaha Sourcing Limited, however, claimed that they have already shipped surgical face masks worth US$2.1 million in accordance with the samples provided.
"The masks already shipped were of good quality. We did not ship any poor quality product," he claimed, adding that they were not informed about the medical use of the masks.
He, however, said they will follow next course of move according to the EPB recommendations. He also said that they would refund the rest US$7.9 million if EPB suggests.
He also alleged that the buyer had asked for the refund after making nine shipments worth $2.1 million. He raised question as to why they (buyer) did not raise the question over quality once they received the first shipment.
The buyer is now asking for the refund as the price of surgical masks have fallen down in recent times and they are taking the products from other countries at a lower rate, he further alleged.