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Chattogram-based conglomerate TK Group’s concern, Shabnam Vegetable Oil Industries Limited, generated over Tk500 crore in profit from a Tk4,000 crore turnover in just two months by creating an artificial crisis in the edible oil market.
Following these allegations, the Bangladesh Competition Commission fined the company Tk32 crore.
An investigation revealed that the company controlled oil supplies ahead of Ramadan and Eid, creating a supply crunch to exploit rising prices and secure massive profits.
According to an investigation by online news portal NPB News, eight local companies forced the government to raise oil prices in 2022 by claiming supply shortages, even though their warehouses had sufficient stock. Shabnam Vegetable Oil Industries Limited acted as a key perpetrator in this syndicate.
A delivery order showed that the company took nearly 25 days to supply oil to its distributors, violating the Essential Commodities Marketing and Distributor Appointment Order 2011, which mandates a maximum 15-day delivery window.
Ignoring the law, Shabnam Vegetable Oil entered into an indirect agreement with its distributors, violating Section 15(1) of the Bangladesh Competition Act 2012. This collusion restricted the supply of edible oil, creating an artificial crisis and driving up demand, which eventually forced the government to increase prices.
Market data from February 2022 confirmed this manipulation when edible oil prices jumped by Tk8 per litre. Although the government fixed the price at Tk168 per litre, up from Tk160, retailers sold it for at least Tk175. The NPB investigation showed that Shabnam Vegetable Oil halved its production capacity to artificially stifle the market and withheld its existing stock despite holding massive reserves of crude soybean oil.
The company intensified its market manipulation in April 2022, when demand peaked during Ramadan. Trading Corporation of Bangladesh (TCB) data showed that soybean oil supplies dropped by 30% in May compared to January 2022, causing prices to spike by 22.47% and 26.67%. During this period, distributors hoarded supply orders to inflate prices, while Shabnam Vegetable Oil withheld deliveries.
Through this scheme, the TK Group entity extracted over Tk500 crore in profits directly from consumers, holding the market hostage.
The Bangladesh Competition Commission confirmed the manipulation through a formal inquiry, written explanations, and hearings. NPB News repeatedly reached out to TK Group Director Mostafa Haidar via phone and WhatsApp, but received no response. The company’s Head of Brand also declined to comment.
When contacted regarding the fine, TK Group Managing Director Md Abul Kalam said, "I do not know," and disconnected the call. He did not respond to subsequent messages. However, company sources confirmed that senior management discussed the matter and decided to challenge the Competition Commission’s ruling in the High Court.
Consumer advocates criticized the Tk32 crore penalty, noting that the law allows the Commission to fine a company up to 10% of its annual turnover. For Shabnam Vegetable Oil, whose turnover exceeded Tk4,000 crore in 2022, the fine represents just 0.8% of that threshold, far below its Tk500 crore windfall profit.
When asked about the penalty, Competition Commission member Afroza Bilkis stated that they opted for a lower fine because it was the company's first offence. "We wanted to offer an opportunity for reform. If they repeat the offence, we will impose harsher penalties. Furthermore, four or five other companies involved in this syndicate face similar actions," she said.
Ministry of Commerce Joint Secretary Tanveer Ahmed said the ministry would seek an official explanation from the company if the commerce minister deems it necessary. Directorate of National Consumer Rights Protection (DNCRP) Director Sebastian Rema declined to comment.
Consumers Association of Bangladesh (CAB) Vice President Nazer Hossain expressed skepticism over the penalty, stating that companies rarely pay these fines. "There is initial media hype, but the Commerce Secretary often waives the penalty during appeals. The appellate authority can completely pardon the fine, and we have demanded an amendment to this law," Hossain said.
