National Bank Ltd has put up advertisements to sell off the mortgaged properties of SA Oil Refinery that failed to repay the lender about Tk 215 crore.

"We have run advertisements to sell the mortgaged properties after the client failed to repay the loans despite several notices," said SM Sajjad Hossain, head of NBL's law and recovery division.

SA Oil Refinery owned by Chittagong-based SA Group took Tk 173.66 crore, in two instalments, in December 2014, meaning the bank has moved to dispose of the mortgaged properties within 13 months of taking the loans.

The borrower has failed to pay since March 31 last year, and a cheque for about Tk 51 crore it had presented to the bank was dishonoured, which is a punishable offence in itself, Hossain said.

The auction notice is a first in recent memory for big business groups from Chittagong, where many conglomerates have failed to pay back loans citing bad business conditions that began in 2007.

The central bank also came up with an arrangement to help these affected business groups by way of restructuring their loans for a longer tenure.

"NBL is not following any rule. I will take legal action against the bank," Shahabuddin Alam, chairman of SA Group, told The Daily Star.

Alam said that after the NBL board's approval, the central bank has extended a rescheduling facility to him for five years.

"Suddenly, I see that NBL has served me a notice, giving three months to pay back the loan."

The bank had sanctioned SA Oil Refinery the loans at the interest rate of 12.5 percent, but it is now charging 17.5 percent plus additional 2 percent, according to Alam.

"I want to repay the bank, but how much? They were compelling me to sign on documents to pay back the loans at a much higher rate than the one they had sanctioned," he added.

SA Oil Refinery now has nearly Tk 215 crore owing to NBL.

The auction notice also puts Alam's directorship in Mercantile Bank in a precarious position: as per the Banking Companies Act 1991, a loan defaulter cannot be a director in a bank.

But a senior Bangladesh Bank official concerned with the matter said Alam can continue to be a board member as the High Court on December 14 last year issued a stay order on his CIB (credit information bureau) status for six months. 

The mortgaged properties of SA Oil Refinery with NBL include 99.33 decimal lands (60 katha) and a building located at Halishahor in Chittagong.

SA Group of Industries started its journey in 1988 with consumer goods, including edible oil, flour, condensed milk, beverage, salt and milk.

Later, the group diversified to many areas, such as real estate, paper, tea and tank terminal for storage of petroleum products. It now has 17 units of industries.

The conglomerate's annual turnover stands at Tk 2,500 crore and it employs over 2,500 people, according to its website.