Newtimes Group has taken aim at allegations that it owes a Bangladeshi supplier hundreds of thousands of dollars.
The Hong Kong procurement giant said that Croydon-Kowloon Design’s characterization of events is inaccurate and that it has not been asked by any Bangladeshi court to pay the disputed amount of $698,000, which the supplier said was left unpaid after it fulfilled a $1.2 million work order for Coldwater Creek in 2019.
Newtimes Group said it simply acted as a third-party quality and production agent for the purchase orders between Croydon-Kowloon Designs and the U.S. retailer, then owned by Sycamore Partners, and that any unpaid amount would have been owed by the “old Coldwater” prior to its bankruptcy filing in late 2020.
Any creditor, it said, would have been eligible to file a claim for the payment of any outstanding amounts when the bankruptcy case was filed. Creditors with valid claims were also paid at the conclusion of the bankruptcy case. Since Newtimes purchased Coldwater Creek at the conclusion of the bankruptcy process, it’s not liable for the sum, it said.
“Newtimes Group takes great pride in the reputation we have built as a fair and trusted partner for more than 60 years,” Alex Angelchik, the company’s managing director, told Sourcing Journal. “Any suggestion to the contrary is false, defamatory and inconsistent with the public record. With respect to these matters, multiple Bangladeshi courts have ruled in our favor, and we will continue to pursue justice wherever and whenever necessary.”
But Imtiaz Moinul Islam Neelim, counsel for the Bangladesh Garment Manufacturers and Exporters Association, previously told Sourcing Journal that Newtimes Development, Newtimes Group’s Bangladesh liaison arm, “fraudulently bought” hundreds of thousands of dollars worth of product and then used Coldwater Creek’s bankruptcy as an excuse to avoid payment. Neelim also argued that since Newtimes purchased Coldwater Creek’s assets for $12.2 million, it has “become the owner of our products without paying any money.”
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“Our case is that Newtimes is liable, as an agent of a foreign principal, under section 230 of the 1872 Contract Act for the total amount, which it tried to evade fraudulently…by acquiring Coldwater Creek with all assets, including its inventory and intellectual property,” he added later.
The Bangladesh Investment Development Authority (BIDA), the South Asian nation’s apex investment promotion agency, revealed last week that it was suspending all activities with Newtimes Development until it presented “satisfactory answers” to a show-cause notice that the agency issued early last month, including the question of the unpaid $698,000.
Croydon-Kowloon Designs had asked BIDA to stop Newtimes Group from “harming national interest and the RMG sector.” Despite a business relationship with Bangladesh that stretched at least 14 years, Newtimes Group did not register with or submit its particulars to the Registrar of Joint Stock Companies And Firms as BIDA guidelines and Bangladesh’s 1994 Companies Act require, the supplier claimed.
Newtimes Group disputes this as well, saying that BIDA first approved and licensed Newtimes Development in 2008 and that it has renewed its license to operate since, with the most recent renewal in 2021.
“We have legally carried out a significant amount of business in Bangladesh, and any allegations that Newtimes has not been properly authorized to operate in the country are completely untrue,” a Newtimes Group spokesperson told Sourcing Journal. “While the Bangladesh government business licensing entity, BIDA, requested information related to Newtimes’ local operations, Newtimes is transparently and voluntarily participating in this process, and is confident the matter will be resolved shortly.”