Deplorable delay in ACC’s loan scam investigation

Published: 00:00, Mar 04,2021


THE banking sector, burdened with loan irregularities, gross mismanagement and undue interference of politically appointed boards in banking affairs, has become a growing malignancy of the economy. Yet the investigation of the financial scams continues at a deplorably slow pace. The High Court on Tuesday, in reviewing the bail petition of a former branch manager of the state-owned BASIC Bank, rebuked the Anti-Corruption Commission for its failure to complete the investigation of any of the 61 cases filed in 2015 in connection with the misappropriation of more than Tk 3,000 crore. The commission’s lawyers tried to justify the delay on grounds that they could not trace the money embezzled and that it is a requisite to the proof of embezzlement. Brushing aside the argument, the court observed that the commission had deviated from principles of investigation as the recovery or tracing of money is required in money laundering cases, not in cases of embezzlement of funds from banks or financial institutions. The High Court said that the commission had also digressed from its own past as it had previously filed many cases in similar situations. The disappointment of the High Court, therefore, is not misplaced.

It is common knowledge that BASIC Bank has become a safe haven for violations as its board illegally dictated loan approval processes and adopted malpractice, tampered with facts and ignored regulators. A Bangladesh Bank inquiry has found that between 2009 and 2013, Tk 4,500 crore was swindled out of BASIC Bank, which was once a healthy public bank. About six years have passed since the 61 cases were filed, but the commission has not completed the investigation of any of the cases. In most of these cases, managerial level bankers face charges and are made scapegoats to intentionally protect the politically appointed board from facing legal action for financial frauds. In 2017, the High Court directed the commission to investigate the alleged involvement of the former BASIC Bank chair and the board members in loan scams and asked it to complete the investigation in 60 days. About a year later, the High Court again expressed its disappointment at foot-dragging by the commission and its failure to take action against the board of the bank. In 2019, the parliamentary standing committee on the law ministry summoned the commission chair to explain the commission’s inaction about bringing to justice the bank board chair in question for his involvement in the scam. It will not be mistaken to suggest that the commission is directly and indirectly leaving room for loan scams to continue, especially because of the slow pace of the commission’s investigation of fraudulent activities of BASIC Bank.

It is high time that the Anti-Corruption Commission came out of its play of rhetoric and prosecuted all the individuals, including the former BASIC Bank board chair in question, responsible. In so doing, the commission needs to expedite the investigation process and prove its institutional integrity. Unless the commission acts accordingly, it will be deemed to be abetting such financial crimes.

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