Bangladesh Bank officers beneficiaries of financial scams: HC

M Moneruzzaman | Published: 23:41, Feb 23,2021


The High Court on Tuesday observed that officers of Bangladesh Bank, who were responsible for overseeing the activities of non-banking financial institutions, were beneficiaries of financial scams carried by scammers at different non-banking financial institutions by illegally facilitating the top brass of the companies.

The company bench of Justice Muhammad Khurshid Alam Sarkar also called Bangladesh Bank’s executive director Shah Alam a ‘thief and a robber’.

Shah Alam was recently discharged of his duties at the central bank’s Department of Financial Institutions and Markets and the Department of Banking Inspection-2 for his alleged connection with fugitive Prashanta Kumar Halder, former director of International Leasing and Financial Services.

‘Bangladesh Bank’s responsible officers used to draw “honey” from the now troubled non-banking financial institutions like People’s Leasing and Financial Services  and International Leasing and Financial Services,’ the company bench came up with the observations while hearing the statements of 53 loan defaulters of People’s Leasing and Financial Services.

Bangladesh’s Bank lawyer Tanjib-ul Alam was present online during the hearing in Bangladesh Bank’s writ petition in 2019 seeking a winding up order for the liquidation of the company.

The court rebuked some of the loan defaulters for remaining silent over the presence of thieves and dacoits in People’s Leasing and Financial Services since the year 2009 and asked why they did not inform the Anti-Corruption Commission or the police.

When one of the defaulters, Shahidul Islam, a retired government officer, stated that he became an account holder at the leasing company as his friend Yusuf Khan was the managing director there, the judge said, ‘Your friend was also a thief.’

The 53 people are among the total 280 loan defaulters, who were summoned by the High Court earlier on January 21, to find a way to recover the defaulted loans of the company now under the process of winding up. 

The court adjourned the hearing until February 25 and asked other loan defaulters to appear before it at the next hearing.

The court asked the Anti-Corruption Commission’s chairman, Bangladesh Bank’s governor and Bangladesh Security and Exchange Commission’s chairman to  appear before it on March 9 for giving their opinions on how the company’s defaulted loans could be recovered and how People’s Leasing Financial Services would get back to business again.

The court would also want suggestions as to how to make sure that the money that is still in the country is not siphoned out of the country.

The court also criticised Bangladesh Bank’s governor for not taking action against its corrupt officers linked to PK Halder and others involved in various financial scams and irregularities.

The court said that it was the duty of the central bank, not that of the court, to look into financial scams and irregularities.

The court passed 70 orders on the bank to perform its duties in the last two years over various scams and financial irregularities of the non-banking financial institutions, the court said, adding, ‘But nothing has so far been done to implement our orders.’

The court said that the bank took a jolt after the High Court interfered and on January 5, 2021 slapped an international travel ban on 25 people, including former deputy governor SK Sur, for their alleged link with PK Halder.

The court rebuked the Anti-Corruption Commission’s chairman stating that the court in June 2019 while hearing Bangladesh’s plea to wind up People’s Leasing and Financial Services, asked the ACC and the bank’s governor to take action against PK Halder, but the ACC in January 2020 informed the court that PK Halder had left the country.

In another order, the company bench on Tuesday reconstituted the five-member fact-finding committee to assess the links and liabilities of the central bank officials, who have been in charge of overseeing the activities of the financial institutions since the year 2002 till today, over any financial scams.

The central bank constituted the five-member fact-finding committee on February 15 to comply with a directive of the High Court given on December 17, 2020.

The court asked the committee to find out whether the bank officials were linked to the irregularities and scams carried out by scammers at Bangladesh Industrial Finance Company Limited, International Leasing and Financial Services Limited and People’s Leasing and Financial Services Limited.

The court appointed two additional members of the fact-finding committee and they are retired district judge Moyeedul Islam and retired secretary Dr Nurur Rahman.

The bank’s deputy governor AKM Sajedur Rahman Khan led the bank-appointed five-member committee.

The four members are the bank’s executive director AKM Fazlur Rahman, general manager of the financial stability department Dr Md Kabir Ahammad, general manager of banking inspection department-4 Md Nurul Amin and deputy general manager of foreign currency inspection department Md Sorowar Hossain.

The court said that the seven-member committee shall be empowered to interrogate any officer of the bank and the aforesaid financial institutions.

They can ask for any document from the above-mentioned financial institutions, added the court in its order.

The court said that if the court-appointed members of the committee raise any issue, the chairman and other members of the committee shall implement the same.

If it is found that any of the members of the committee is involved with any transaction of the three financial institutions then the member will be discharged of his duty, the court said.

The company bench on December 17, 2020 asked the bank governor to form the fact-finding committee observing that ‘for the case in hand, the general managers who were in charge of overseeing the activities of the financial Institutions from the year 2002 to the present day should be made answerable for causing the disaster in the financial sector.’

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