The company’s total debt is now Tk544 crore, which is Tk140 crore more than the amount mentioned in the central bank’s inspection report
E-commerce platform Evaly’s actual debt to customers and merchants is higher than the amount mentioned in the Bangladesh Bank’s inspection report submitted to the commerce ministry, according to its Managing Director Mohammad Rassel.
The total debt of Evaly now stands at Tk544 crore, which is Tk140 crore more than the amount mentioned in the central bank’s inspection report submitted to the commerce ministry in June this year.
Evaly’s liability statement did not separately show the amount of debt owed to the customers and merchants.
The total value of its movable and immovable assets is worth Tk121 crore, according to the Evaly statement. In other words, if all the movable and immovable assets of the company are sold, the company would be able to pay only 22.30% of its debts to the customers and merchants.
According to Evaly’s balance sheet, the company’s total movable assets amount to Tk15.82 crore. It has property, a plant and equipment worth Tk14.87 crore in immovable assets. Apart from this, the company’s current assets amount to Tk90.66 crore.
Excluding all movable and immovable assets of Evaly from the total debt, the deficit stands at above Tk422 crore. In the balance sheet of the company submitted to the commerce ministry, Evaly has shown Tk422.62 crore, an amount equal to the deficit, as the brand value of the company.
In a letter submitted to the commerce ministry along with the financial statement, Mohammad Rassel claimed, “According to international standards and the recent evaluation of similar businesses in neighboring countries, currently the minimum brand value of Evaly is worth Tk5,000 crore. However, in determining the brand value of our company, we have considered an amount which is equal to our expenditure only.”
zooFamily founder Luthfe Ali told The Business Standard, “The actual brand value of Evaly is negative, because the business model the company is following is not sustainable. On the contrary, with the huge amount of liability that Evaly has created in just two years, it is not possible for the company to generate any assets in the future.
“If Evaly now wants to sell any Tk100 product at even Tk50, buyers will not be interested. There is no scope for a company, which cannot pay its customers, to have a positive brand value. Rather, the actual brand value of Evaly should be the negative amount of its claimed brand value.”
In fact I brought- “ A Product by 9800 BDT, but I didn’t receive it. For discount I purchased the product but my investment gone with evaly flow. I paid the balance by online mobile banking and I knew there is evidence where I paid. I have right to claim a GD (general diary or complain). But the fact is their is a lot people under the same roof. And my small investment to check by order being a full of mistakes. I think it’s impossible to get back to my hand, because government has more important issues to look at. But all general people paying a tax to government, so government should be more concern about them.
Earlier, in an inspection report in June, the Bangladesh Bank said till 14 March this year, the amount of Evaly’s liability to customers and merchants was Tk403 crore. The company’s current assets are worth Tk65 crore. It means, only 16% of the company’s debts can be paid if all Evaly’s assets are sold.
After the publication of a TBS report on 21 June on the central bank’s inspection report, the commerce ministry issued a show cause letter to Evaly last month, seeking the company’s liability statement and plans to pay it off. The ministry issued another show-cause letter as Evaly failed to provide the information within the scheduled time.
Finally, on Wednesday, the company submitted its liability statement to the ministry.
In its inspection report, the Bangladesh Bank said till 14 March this year, Evaly did not deliver products against a cumulative sum of Tk213.94 crore in advance payments from customers. Moreover, the company owes Tk189.85 crore to the merchants from whom it bought products.
Mentioning that the information was provided by the company itself to the inspection team, the BB report said that the inspection team tried to enter the replica database of Evaly to verify the accuracy of the information, but the company did not allow it. Evaly’s actual debt would be even higher, the report assumed.
Highlighting the inclusion of e-food, e-jobs, e-bazar, e-health and flight expert to Evaly, Mohammad Russell claimed in his letter to the commerce ministry that these initiatives have further enriched the overall brand value of the company.
Claiming to have delivered 2.74 lakh old orders in the last one month, Evaly said that it would open an office from 22 August to deliver old orders to customers and pay off merchants’ debts.
Md Hafizur Rahman, additional secretary to the commerce ministry and also the head of the central digital commerce cell, told TBS that Evaly has submitted the company’s liability statement. Information has also been sought on how much money Evaly has taken from customers, how much the customers and merchants owe and its business plan for clearing the debt. After receiving all the information, the committee formed by the government will meet and take the next decision.
What Jamuna Group says regarding investment in Evaly
He said, “Some of my colleagues have reviewed Evaly’s business model and they have also discussed with me a variety of issues regarding the type of business of the company. It seems that the company’s business model is flawed and unsustainable. But if Evaly says that the amount of liability, deducting its assets, is its brand value – it is not acceptable at all.
“Evaly’s business model is flawed. A company cannot buy a product at Tk55 and sell it at Tk50. When the buyer sees that Evaly is taking less than the market price, they place an order there. Evaly has attracted far more customers than it was capable of serving. Although Evaly considers it a positive trend, it has actually been detrimental to the company.”
He said Evaly has created a huge amount of debt in just two years. Although various government agencies warned the company at various times, the company did not take it seriously. Rather, it has used the influential people of the society in such a way that the investigation against Evaly has been hampered. In this sophisticated way, it has deprived the customers. If Evaly really saw the interests of the buyers, their business situation would have improved. I know a number of merchants to whom the company is indebted to.
The brand value of a company is created when there is a possibility of acquiring more assets in the future using the current assets of that company. But Evaly’s business model is obsolete and not sustainable at all. It has no future. Such a company cannot have any brand value. If Evaly wants to sell products at less than the market price, buyers will not be interested. So, it is not supposed to have any brand value.