Tk700cr unpaid insurance, Tk1,900cr default loans stall Gazi Tyres' relaunch
Claim settlement complicated as general policies exclude events like the ‘July movement’, says IDRA spokesperson
Fire-ravaged Gazi Tyres Factory's plan to restart production is being held back by delayed insurance payouts and unresolved loan rescheduling, according to insiders in Gazi Group.
The group's tyre plant, which once held around 50% market share across segments ranging from rickshaws to three-wheelers and commercial vehicles, was set ablaze and destroyed after the Sheikh Hasina government was overthrown in an uprising in August last year.
Gazi Group has filed insurance claims worth around Tk700 crore with two insurers – Federal Insurance and Asia Insurance – but more than a year later, the claims remain unsettled.
"Insurance companies say there is reinsurance with the state-owned Sadharan Bima Corporation (SBC) and foreign companies, and it takes time to settle the claim. There are many formalities," said a Gazi Tyres executive, requesting not to be named.
Compounding the crisis, Gazi Group's bank loans, estimated at around Tk1,900 crore, have now turned defaulted following the arrest and imprisonment of its founder, Golam Dastagir Gazi, a former minister in Sheikh Hasina's cabinet.
"We are trying to reschedule the loans. We already had a meeting with Bangladesh Bank," said an official of the group. "Unless loans are rescheduled, we cannot do business and open LC for machines and raw materials."
Despite the setbacks, the official expressed hope of reopening the tyre factory, at least partially, by the first quarter of 2026, starting with auto-rickshaw tyre production.
Founded in 1974, Gazi Group later expanded into plastic, rubber products and water tanks. In the 1980s, it entered the tyre market, initially manufacturing rickshaw tubes.
Gazi Auto Tyres, established in 2002 in Rupganj Upazila of Narayanganj, became the first manufacturer in Bangladesh to produce tyres for commercial vehicles, eventually adding bus and truck tyres. The factory employed around 3,000 workers.
Insurance dispute
When contacted about Gazi Group's insurance claim, Imam Shaheen, managing director of Asia Insurance, said the company could not forward the claim to SBC because the state insurer is "regretting to accept" claims related to the post–5 August incidents, including factory vandalism across the country.
"Probably IDRA, the insurance regulator, will hold a meeting to discuss the issue," he told The Business Standard yesterday.
AMM Mohiuddin Chowdhury, managing director of Federal Insurance Company, said, "This [the issue of Gazi's claim] cannot be discussed over the phone."
However, Anwarul Islam, assistant general manager (reinsurance) at SBC, told TBS that the corporation has not yet received any insurance claim applications from the insurers regarding Gazi Tyres' payments.
When contacted, Saifunnahar Sumi, spokesperson for the Insurance Development and Regulatory Authority, told TBS that the risks covered by general insurance companies in Bangladesh do not include incidents like the "July movement."
"Internationally, such situations are usually treated as popular uprisings or civil commotions," she said. "As a result, complications have arisen in settling the recent claims."
However, the claim raised has drawn attention to examples from other countries – where separate policy conditions or dedicated coverage exist for such incidents, allowing insurers there to make payouts, Saifunnahar said, adding, "In Bangladesh, no such coverage has been introduced yet."
"Either way, this is the first such experience in the Gen Z era. With the possibility of similar incidents in the future, the coverage structure of insurance policies must be reconsidered," she said. "At the same time, the authorities believe that the issue of including this risk in reinsurance arrangements needs to be given serious consideration."
Bangladesh / Top News
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