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What went wrongGold traders in Hazari Goli, Chattogram, in a Samakal report

Gold advanced to a workshop never came back, and both 6-crore cheques bounced

Thirteen traders in Hazari Goli handed gold and cash advances to one casting workshop between 9 and 12 October, an exposure they put at about 60 crore taka in total. Both of the 6-crore-taka security cheques he had given them bounced.

Thirteen gold traders in Chattogram's Hazari Goli placed jewellery orders with one casting workshop, handing over gold and cash in advance. The orders were given between 9 and 12 October, and the man running the workshop disappeared without delivering. Individual exposures ranged from 1.5 crore taka and 50 bhori at the smallest to 12 crore taka and 600 bhori at the largest, and together the traders put the loss at about 60 crore taka. The two cheques of 6 crore taka each he had given as security both bounced. Around 255 small retailers across 20 Chattogram markets had orders caught in the same collapse, and one of the traders said a lifetime of savings was gone. In this trade the whole working capital moves as unsecured advances to a karigar, so one absconder empties a market's worth of shops at once.

Lessons

  1. 1.In the jewellery trade the whole working capital goes out as unsecured advances to a karigar; one absconder takes out many shops at once
  2. 2.A cheque from the person holding your stock is not security: both of these bounced, and the gold was already gone

Published with the person's permission, without revealing who they are.

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