AL leader sells off 7,398 bhori gold from Samabaya Bank vaults

General clients took loans by depositing or mortgaging gold in the Bangladesh Samabaya Bank Limited.

Its former chairman – Mohiuddin Ahmed, who is also joint general secretary of Awami League’s Dhaka south unit – sold off the customers' assets with fake ownership records.

According to documents, Mohiuddin Ahmed illicitly sold off a total of 7,398 bhori of gold in 2020, which currently holds a market value of around Tk 1 billion. It affected a total of 2,316 clients of the bank. 

Its supervising entity, the rural development and co-operatives division, initiated an investigation into the incident but was forced to stop following intervention of Mohiuddin Ahmed. Officials said Mohiuddin Ahmed used his influence to halt the investigation.

In 2021, the Anti-Corruption Commission (ACC) filed a case regarding the sale of the gold, primarily accusing Mohiuddin and eight others. In the same fashion, he removed his name from the list using his political clout. 

Following the downfall of the Awami League government on 5 August, Mohiuddin Ahmed has gone into hiding, like other party leaders.

The issue of selling off deposited gold has resurfaced recently through a statement by the interim government’s advisor on local government and cooperatives, Hassan Ariff.

At a programme in Cumilla on Sunday, he said, “While inspecting the situation at the Samabaya Bank, I came to know that 12,000 bhori (ACC mentions 7,398 bhori in its case) of gold have been missing.” 

The adviser, however, vowed to take legal actions against the responsible ones and disclosed that a committee has already been formed to look into the issue.  

It led to renewed panic among the clients, with many approaching the headquarters in the capital’s Motijheel area on Monday and Tuesday, demanding to see their gold. 

Ahsanul Gani, the acting general manager of the bank, said, “It is true that there were irregularities regarding the sale of mortgaged gold in 2020. It was reflected in the ACC report as well.” 

The Samabaya Bank, a specialised bank, is administered by the rural development and co-operatives division, unlike the scheduled banks under the Bangladesh Bank. 

People can take loans from the bank mortgaging their gold. Currently, it provides Tk 55,000 against each bhori of pure gold, with an interest rate of 17 per cent and an insurance fee of 1 per cent. The clients can reclaim their gold by paying the interest and principal amount. As per rules, the mortgaged gold can be auctioned if a client fails to repay the loan on time.

According to the ACC case, the then-chairman, Mohiuddin Ahmed, sold the mortgaged gold using a fake owner as well as fake national identity card, instead of auctioning it. 

One of Mohiuddin Ahmed’s accomplices in the fraud was senior officer Nur Muhammad. He is a nephew of Mohiuddin Ahmed. He is accused number six in the ACC case, which is now under trial. 

Mohiuddin Ahmed joined the bank as chairman in 2009, when he was a leader of Jubo League, youth front of then ruling party, Awami League. As there is no scope for a chairman to serve more than three terms as per rules, he was supposed to retire from the post in 2018. But it did not happen, and he continued serving in the position until 2022. 

The ACC noted in its case that many clients applied to the bank’s headquarters to get back their mortgaged gold in 2020.

The ACC verified 455 of the applications and found 335 of those to be mismatched with original documents of the clients. It indicates that the gold was shown to have been reclaimed by its owners, who were actually fraud. 

Later, the gold was sold off, and the money was embezzled after paying the amount owed to the bank.

Using the method, a little over 1,594 bhori of gold from the Samabaya office in Dhaka were sold off fraudulently. 

Meanwhile, Narayanganj cooperative credit limited, a member of the Samabaya Bank, runs a credit programme by mortgaging gold. It re-mortgages the gold that it receives from the clients to the Samabaya Bank. 

The ACC noted in its case that a total of 5,803 bhori of gold of Narayanganj cooperative credit limited were sold off in the same fashion.   

The ACC also noted in its case that the then-market value of 7,398 bhori of gold belonging to 2,316 customers in Dhaka and Narayanganj was more than Tk 400 million, while its interest and principal of the loan in exchange amounted to nearly Tk 290 million. Here, a total of Tk 114 million was embezzled by falsely showing the amount paid. 

Kakali Jahan, a resident of the Swamibagh area in the capital, took a loan of Tk 93,000 by mortgaging eight bhori of gold with Narayanganj Cooperative Credit Limited. When she tried to reclaim her gold after depositing Tk 120,000 as the loan interest and principal, she was denied. She has been pursuing the issue for over a year.

The current market value of the gold deposited by Kakali Jahan is around Tk 1.8 million. She deposited Tk 120,000 in the association but has not received anything in return. 

Speaking to Prothom Alo on Tuesday, she said, "I have some gold mortgaged in the Samabaya Bank. The statement of the adviser is now giving an impression that it has also been sold."

Mohiuddin Ahmed was the prime accused in the statement of the case filed by ACC. He was the man who was blamed for selling the gold. However, ACC removed his name from the charge sheet.

A total of eight were accused in the charge sheet. They are: Abdul Alim, deputy general manager of the bank, Hedayet Kabir, assistant general manager, Md Ashfaquzzaman, assistant general manager, former principal officer Mahabubul Haque, principal officer Omar Faruq, senior officer Noor Mohammad, assistant officer Abdur Rahim and assistant officer Nahida Akhter.

Bangladesh Samabaya Bank has suspended the eight officials who were charged. All of them are now on bail.

In a press briefing on Tuesday, ACC director general Akter Hossain was asked as to how the prime accused in the case statement was removed from the charge sheet.

He refused to make any comment since the matter is under trial.

Mohiuddin Ahmed allegedly indulged in more corruption when he was the chairman of the bank.

He spent Tk 50 million more than the approved cost of Tk 310 million in construction of a 10-storied building of the bank in Narayanganj. Mohiuddin did not take any sort of approval from the relevant ministry or any other authorities to spend more than approved. He also allegedly resorted to irregularities in allocation of space of the building.

According to a probe report of the Department of Cooperatives, Mohiuddin rented out a portion of the building’s space to relatives of Awami League’s lawmaker Shamim Osman at less than market price. While the relatives of the MP were charged Tk 21 per square feet while the rent per square feet is at least Tk 100 taka, says the locals.

Another portion of the building was rented out for only Tk 5 per square feet to another organisation. That organisation is not paying the rent for four years.

Mohiuddin Ahmed recruited 176 officers and employees in various positions in the bank between 2010 and 2018. According to a report, the bank submitted to local government and co-operatives adviser last week, Mohiuddin Ahmed made these appointments without considering the bank's financial condition. Most of those recruited are from Brahmanbaria’s Bancharampur upazila, which is the birthplace of Mohiuddin Ahmed. Of the 176 recruited, 63 are relatives of Mohiuddin.

The report said most of those recruited during Mohiuddin’s tenure are incompetent, dishonest and indisciplined. At least 130 of them took housing loans from the bank. Many were given amounts more than the ceiling. They did not also submit any appropriate deposit against the loan. The officials of Samabaya Bank are entitled to home loans ranging between Tk 5 million and 7 million.

Transparency International Bangladesh’s (TIB) executive director Iftekharuzzaman told Prothom Alo that even such gross irregularities in banks no longer surprise us. The scam in BASIC Bank and Janata Bank took place in connivance with the people who were in top positions. They got involved with various irregularities.

This corruption in Samabaya Bank is yet another example of ACC’s failure to do anything against those powerful, Iftekharuzzman added.