Court issues Peacocks with Bangladesh injunction

DHAKA – British clothing retailer Peacocks has been temporarily banned from doing business with Bangladeshi garment factories. A Dhaka court has imposed a temporary injunction on the company after four Bangladesh-based garment exporters filed a case against Edinburgh Woollen Mill (EWM), of which Peacocks is a subsidiary. The four companies alleged that the UK clothing retailer set up new trading companies to side-step debts of US$600,000.

The court said the injunction would remain effective until the submission of a written objection by the defendant, setting July 4 as the next hearing date.

It also said that the injunction was not imposed, the defendant would continue to defraud and harm Bangladesh’s garment sector.

“Granting injunction will send a worldwide message that Bangladesh will not be exploited by unethical buyers anymore,” it added.

Md Shah Paran, who represents the four plaintiffs, told The Business Post in Bangladesh that no local manufacturers would be able to make Peacocks products because of the court order.

“The EWM lawyer sought more time during the last hearing, but the court rejected the plea. If they submit an explanation in black and white at the next hearing, we will still urge the court to uphold the injunction,” he said. “This judgment will put pressure on EWM to clear its dues,” he added.

Previously, the lawyer for the four factories who filed the original case said invoices for goods shipped from Bangladesh for Peacocks were not being paid because EWM claims not to own Peacocks anymore. Peacocks was acquired by two new companies – Purepay and Anglo Global – after Peacocks filed for bankruptcy in a UK court. As a result, EWM Group claims it is not obliged to pay its outstanding debts to Bangladesh garment manufacturers.

However, the four Bangladeshi suppliers claim Peacocks, Purepay and Anglo Global are all are part of the EWM Group which is owned by British billionaire Philip Edward Day. They argue that EWM should therefor be obligated to pay the debts of its “sister concern” Peacocks.

Around 34 RMG factories have been left with outstanding debt by EWM Group since 2020, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

BGMEA says EWM cancelled work orders worth US$8.22m (£6.76m) across five factories due to the Covid-19 pandemic situation.

BGMEA sent a letter to British billionaire Philip Day in 2020 asking why outstanding bills were not paid but received no response.

BGMEA subsequently threatened to blacklist EWM, its affiliates and third parties like agents, importers and service providers (those who have direct and indirect businesses with EWM).

The affiliates of EWM include Peacocks, Jaeger, Austin Reed, Jacque Vert, Country Casuals, Windsmoor, Baumler of Germany, Bonmarche and Ponden Home.