The management of state-owned BASIC Bank have informed Financial Institutions Division that they have no jurisdiction to take legal action against previous directors on its board, led by controversial Sheikh Abdul Hye Bacchu, for misappropriating Tk 76 crore in the purchase of floor space of a building, officials said.
Led by chairman Alauddin A Majid, the current board of the scam-hit bank stated its position in a reply issued on January 4 about the legal actions recommended by the division, they said.
While talking to New Age on Saturday BASIC Bank managing director Muhammad Awal Khan explained that they could not take legal action against the previous board members appointed by the government as they required directive from the finance ministry to ‘file criminal cases against the violators of the rules’.
He noted that the matter was very ‘technical’.
A senior financial institutions division official on condition of anonymity commented that the reply by the bank management was ‘bureaucratic’ and would delay the much needed legal action to safeguard public funds.
The official said that the division was examining the reply to take the next course of action.
If necessary, the division would seek suggestion from finance minister AMA Muhith on the issue, he added.
In September last year, the financial institutions division asked the current management to take legal actions against the previous board members for not taking mandatory approval from the prime minister to purchase 51,500 square-feet space of a multi-storey building at Motijheel in the capital in 2010 at a cost of Tk 76 crore.
The scam-hit bank is yet to acquire a single inch of space of the under-construction building in 8 years because of the ‘flawed and unregistered purchase agreement’.
BASIC Bank chairman Alauddin A Majid said that they had tried, without success, to acquire the space of the building in the past three years.
The building owner had given several conditions, which included the bank buying six more floors at much higher price, for handing over the space, he said.
They did not accept as that could be further damaging to the bank, he explained.
Besides floor scam, the previous board had extended shady loans worth over Tk 6,000 crore, most of which has now turned into bad loans putting the once profit-making bank to face severe liquidity crisis.
In 2015, Anti-Corruption Commission filed more than 50 cases accusing 153 people, including former BASIC Bank managing director Kazi Fakhrul Islam, of misappropriating about Tk 747 crore from Gulshan and Motijheel local branches of the bank.
Kazi Fakhrul Islam has been in hiding since his dismissal with nine senior bank officials in May 2014.
The commission, which failed to file any case against previous directors since the detection of loan scam in 2013, is now interrogating Abdul Hye following annoyance expressed by the Appellate Division for not naming former directors in two cases relating to fund misappropriation.
Officials said that most directors of the controversial board got promoted to higher government positions although they had failed to prevent misappropriation of huge amount of money from the bank.
Transparency International Bangladesh executive director Iftekharuzzman said that it was sad that many controversial directors of BASIC Bank were promoted despite their failure to protect interests of the bank.
The controversial directors cannot avoid their responsibility for the poor condition of the bank, he said.
Officials said two out of six public servants serving as directors of the bank during the scams period, from 2009 to 2014, were promoted to secretary positions.
Both Shuvashish Bose, now secretary of commerce ministry, and Syam Sunder Sikder, secretary of post and telecommunications division, were former directors of BASIC Bank.
Another former director Fakhrul Islam was also promoted as secretary in August 2014.
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