TDS Desk:

Summit Group has called on key government agencies in Bangladesh to take immediate action against what it describes as baseless allegations of money laundering and tax evasion.

The company highlighted the importance of resolving these issues to safeguard its investment plans, which total $3 billion over the next five years, focusing on sustainable energy projects.

Summit Power International Chairman, Muhammed Aziz Khan, addressed a letter to Chief Adviser Muhammad Yunus, requesting that government bodies, including the Criminal Investigation Department (CID), Bangladesh Bank, and the Bangladesh Investment Development Authority, publicly clarify the matter to preserve investor confidence.

The letter underscored the need for support in upholding existing contracts and facilitating future investments aimed at zero carbon emissions.

Impact of Allegations on Business Operations and Reputation

Aziz Khan expressed concern that the false accusations were damaging Summit’s reputation, both domestically and internationally, as well as harming Bangladesh’s appeal as an investment destination. Media reports claiming that Summit was under investigation for financial misconduct have reportedly led to visits from government officials to the company’s Dhaka offices in search of confidential documents.

The Summit letter noted that such actions, based solely on unverified media claims, could undermine investor confidence and threaten the company’s ongoing operations, which are critical to Bangladesh’s economic development.

Overview of Summit Power International’s Foreign Investments

Summit Power International (SPI), co-owned by Japan’s JERA, acquired shares of Summit Corporation Limited in 2016 through a transaction valued at $167.9 million. The acquisition, financed by the International Finance Corporation and supported by entities such as the Islamic Development Bank and Daelim Energy Co Ltd of South Korea, was carried out in compliance with Bangladeshi and Singaporean laws.

Since then, SPI has invested $2.4 billion in Bangladesh, partnering with international companies like General Electric and Japan’s Taiyo Life Insurance. These investments have generated over 2,500 MW of electricity for the Bangladesh Power Development Board (PDB) and the Rural Electrification Board (REB).

Challenges Facing Summit’s Business Operations

Summit Group is facing multiple business pressures, including delayed payments from the BPDB, the depreciation of the Bangladeshi taka, rising interest rates, liquidity shortages in the banking sector, and recent attacks on its facilities. The company has also been targeted by what it describes as baseless media reports accusing it of financial misconduct, which further exacerbates these challenges.

Clarification on Capacity Payments and Media Misunderstandings

In the letter, Aziz Khan clarified misunderstandings surrounding capacity payments for power plants, which are a critical part of Bangladesh’s Private Sector Power Generation Policy of 1996. The capacity payments, designed to cover fixed costs such as debt service and maintenance, provide stability for private investors and help ensure the viability of large-scale infrastructure projects.

Summit’s power plants, Khan noted, were awarded contracts at the lowest tariffs available at the time and are among the most efficient in the country. He emphasized that comparing electricity generation costs without evaluating all variables can lead to misleading conclusions, and reiterated that Summit’s capacity payments are among the lowest in Bangladesh.

Clarification on Wealth Reported by Forbes

Aziz Khan also addressed misconceptions regarding his wealth, as reported by Forbes. He explained that Forbes’ assessment was likely based on publicly available financial data from SPI, which KPMG audits. According to SPI’s 2023 financials, the company’s assets total $2.49 billion, with liabilities of $1.46 billion, resulting in a net worth of approximately $1.03 billion for shareholders.

Khan noted that the assets mentioned by Forbes primarily represent physical investments in Bangladesh, owned by his family, most of whom hold permanent residency outside the country. He added that he has been a permanent resident of Singapore since 1988.