He declined stating that the agreement offered no guarantee Hydroxide Knitwear would be paid. Chowdhury, whose company has engaged ERA Legal in Australia, said after he refused the proposal he received a letter from Mosaic dated September 25, in which it made a counterclaim against Hydroxide for $US1.38 million.

Mosaic made the $US1.38 million claim against Hydroxide Knitwear for late delivery of products or defective products. Mosaic management, through a spokesperson, declined to discuss the letter.

Chowdhury, who said Hydroxide Knitwear works with the owners of global brands such as Zara, Mango and Jack & Jones, said he had never had such difficulty with a retailer before. Hydroxide Knitwear employs 4000 staff.

“These are totally unilateral claims they’ve made, none of which I’ve accepted. They’re using this claim to stop my payment,” he claimed.

“They acknowledged that they owed me the money, and they offered me a payment plan.”

Chowdhury said some of the Bangladeshi suppliers that hadn’t been paid by Mosaic were under immense financial pressure. “There’s going to be factories that are going to be shutting down,” he claimed. “There’s going to be workers who earn $US200 a month, and they’re not going to get paid. It’s very distressing. There are some people on the verge of suicide.”

Hydroxide Knitwear has since issued Mosaic with a statutory demand for the debt it’s owed.

At least 11 factories in Bangladesh are owed $US8.62 million ($12.3 million), with the real figure likely closer to $US15 million, this masthead has been told. At least three Bangladeshi suppliers have discussed with this masthead the negotiations and payment terms that Mosaic have proposed to them but have not been accepted.

Mosaic shares remain suspended on the Australian Securities Exchange after the company failed to file its financial accounts twice as it attempts to manage costs and loss of sales.

Mosaic Brands has cycled in and out of profitability in recent years and was caught on the back foot during the pandemic lockdowns and was forced to rapidly improve its e-commerce offering. Cash flow has also been constrained by lower spending by consumers affected by cost of living pressures.

“Mosaic will lodge its appendix 4E and audited annual financial report once they are finalised,” the company said. “The delay is due to events after the reporting period, which will impact the disclosures accompanying the audited results.”

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