HC bars 11 former PLFS directors, officials from fund withdrawal

BB moves HC for liquidation of the crisis-hit NBFI

HM Murtuza | Published: 00:00, Jul 15,2019


The High Court on Sunday issued an injunction preventing withdrawal of money by eleven individuals — nine former People’s Leasing and Financial Services Limited (PLFS) directors and two former officials — from their accounts maintained with banks, non-bank financial institutions and cooperative societies.

The 11 individuals including former PLFS directors M Moazzam Hossain, Nargis Alamin, Humaira Alamin, Arafin Shamsul Alamin, Mohammad Yusuf Ismail, Motiur Rahman, Biswajit Kumar Roy, Khobiruddin Mia and Mohammad Shohidul Haque, and former top executives Kobir Mustaq Ahmed and Nripendra Chandra Pandit would not be able to transfer their moveable and immoveable properties, BB legal counsellor Kazi Ershadul Alam told New Age.

Moazzam was also chairman of PLFS.

The company bench of Justice Muhammad Khurshid Alam Sarkar also asked the 11 individuals to explain why their bank accounts would not be frozen permanently.

The bench passed the order after hearing an application filed by Bangladesh Bank under the section 29 of the Financial Institution Act 1993 for liquidation of PLFS.

The HC accepted the prayer of Bangladesh Bank for PLFS’ liquidation for hearing, Ershadul said.

The court also appointed BB deputy general manager Md Asaduzzaman Khan as provisional liquidator of PLFS.

As the scam-hit PLFS has been failing to repay depositors’ money at the maturity, the central bank on May 21 this year requested the finance ministry to liquidate PLFS and got the finance ministry’s approval on June 26.

Earlier, the BB removed its previous board of directors based on an inspection on June 9, 2015.

The situation of the NBFI, however, continued to deteriorate despite the BB moves to revive its financial health.

As of December last year, People’s Leasing, established in November, 1997, collected around Tk 2,000 crore- Tk 700 crore from individuals and Tk 1,300 crore from different banks and NBFIs.

Out of the entity’s Tk 1,131 crore disbursed loans, Tk 748 crore has become defaulted, as per the BB information.

Of the defaulted loans, Tk 570 crore has been swindled by the entity’s directors.

People’s Leasing, also a listed company, floated its shares at the Dhaka and Chittagong stock exchanges in 2005.

General shareholders hold 68 per cent of the entity’s shares, 23 per cent is held by its sponsor directors and the rest 9 per cent by institutional investors.

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