With the intervention of Apparel Export Promotion Council (AEPC), six city-based knitwear exporters were paid Rs 2.15 crore by a shipping firm for the goods exported to a US buyer, who declared bankruptcy and cheated the exporters.
Speaking to reporters, AEPC vice-chairman A Sakthivel said, “In the first place, these knitwear exporters would not have been cheated if they had utilized the services of Export Credit Guarantee Corporation of India (ECGC), whose job was to provide information on financial standing and credibility of international buyers.”
“Many exporters in the industry would shy to pay premiums to ECGC and they would directly involve in trade with buyers without consulting with the corporation, which is a wrong practice,” he added.
A US importer had placed orders to six exporters in the dollar city. The garments were exported during different periods till beginning of 2018, as scheduled, with a value to the tune of Rs 6.15 crore. The goods were sent through two transport shipping agents and original documents, including Letter of Credit, the guarantee letter given by banks of foreign buyers to assure that payment will be made once goods reached the buyers, to the respective banks, said an AEPC official.
Meanwhile, the importer declared bankruptcy, but he never revealed about his company status nor gave guarantee on payments. Further findings revealed that the two shipping agents have delivered the goods to the buyer even after he failed to produce transport documents, which would be given by his bank.
It was clear violation of international trade law, said the official.
The exporters approached AEPC. Legal actions were initiated against the two shipping agents, who have pan India presence. The insolvency and bankruptcy code, 2016 binds the agents. Now, one of them provided Rs 2.15 crore while the other is facing law. The other agent may also be forced to give the compensation, the official added.