PLFS’ liabilities higher than assets: data

Staff Correspondent | Published: 00:00, Jul 12,2019

 
 

Liabilities of People’s Leasing and Financial Services Limited (PLFS), which would be liquidated soon due to massive irregularities by its directors, would be higher than the assets of the entity once its previous years’ losses and deferred expenses are excluded from its assets.

Assets of People’s Leasing and Financial Services would reduce by at least Tk 1,725.3 crore from Tk 3,263.25 crore that was shown in its financial statements, according to the entity’s annual reports for the year of 2017.

If the amount is deducted from the assets, PLFS’ assets would decline to Tk 1,537.65 crore, Tk 498 crore lower than the entity’s liabilities — Tk 2,036 crore.

At a press briefing held at the Bangladesh Bank headquarters in capital Dhaka on Wednesday, BB executive director and spokesperson Md Serajul Islam informed that the PLFS’ assets were higher than the liabilities of the entity.

According to the entity’s audited financial statements for the year of 2017, PLFS showed its assets at Tk 3,263.25 crore that included its losses of Tk 1,568.65 crore.

PLFS incurred Tk 307.37 crore in losses for margin loans and another Tk 1,261.28 crore for other reasons.

Asked about the reports, a chartered accountant told New Age that losses could not be treated as assets of any entity.

Such losses are usually shown as assets in financial statements, he said.

The auditor of PLFS, Rahman Mostafa Alam and Company, also raised the issue in its qualified opinions.

The auditor mentioned that ‘as the asset (Tk 1,568.66 crore) is not recoverable, no provision has been made against this unrecoverable asset.’

PLFS in its financial statements added another Tk 156.64 crore interest expenses as assets in violation of International Accounting Standards, the auditor in its qualified opinions mentioned.

BB officials said that they were aware about the issue regarding PLFS’ financial statements.

The central bank officials, however, said that they would be able to get actual information about the assets and liabilities of the entity when liquidator would be appointed by the central bank.

The liquidator as per an instruction of the High Court would take measures for payment of depositors’ money, they said.

As the BB took approval from the government before applying to the High Court for liquidation, the government might take measures to meet up any deficit in repaying depositors’ money upon instruction from the High Court.

Meanwhile, a large number of depositors on Thursday visited the office of People’s Leasing in the city’s Gulshan to get back their money.

The officials attending the office, however, failed to give them any hope.

Besides the depositors, dejected employees of PLFS also gathered at the company’s office and demanded their due salaries and other service benefits before its liquidation.

On June 24, the finance ministry endorsed a BB proposal to wind up People’s Leasing as the central bank failed to recover the health of scam-hit PLFS.

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