A group embezzled Tk 7.69 billion from the National Bank using three fake companies. They even used the loans granted in favour of a new shell company to repay the dues of a previous one. And, a portion of the embezzled money went to the accounts of Sikder family members, owner of the bank.
The loans were disbursed between 2018 and 2020 and were intended to purchase television broadcasting equipment and construction materials.
Now, the companies’ total dues to the bank stands at Tk 7.69 billion. Failing to reach them despite repeated attempts, the bank declared them ‘willful defaulters’ and wrote the central bank to take due action in this regard.
According to documents, the funds were withdrawn using the address of building no. 42, Shaheed Journalist Selina Parvin Road, Malibagh, Dhaka – a location identified as the office of Desh Television.
The loans were issued under the names of Desh Television officials. But the bank could not locate any of the three borrowing companies at the address. The companies are – Prakriti Associates, Hasan Telecom, and Broadway Real Estate. Among them, the Broadway Real Estate, which owes Tk 6.68 billion, has been officially declared a 'willful defaulter.'
National Bank, a first-generation institution, has been grappling with a liquidity crisis, white its officials are facing untoward situations at different branches while facing the clients. According to the officials, the crisis stemmed from non-repayment of loans by borrowers.
For years, the bank was controlled by the Sikder Group and later briefly by the S Alam Group. Following the student-led uprising that toppled the Awami League government, sponsor director Abdul Awal Mintoo took the charge of chairman in the bank. However, its liquidity crisis is yet to subside. It is now trying to deal with the crisis by borrowing money from different banks.
When asked about the situation, Abdul Awal Mintoo said many borrowers are not repaying their loans, while some cannot even be contacted. It led to a liquidity crisis.
“It has been decided in a meeting of the board of directors to declare four companies as willful defaulters. They will face punitive actions if the Bangladesh Bank takes action as per its rules. It will also set an example for others,” he added.
Regarding the way out, Abdul Awal Mintoo said, “Transactions in the banks will return to normalcy within the current week. Various steps have been taken in this regard.”
Tactics of loan disbursal
On 1 November, 2018, Hasan Telecom applied for a Tk 2.75 billion loan from the Mohakhali branch of the National Bank, to facilitate its business of supplying television broadcasting equipment. The loan was approved by the bank’s board on 27 November. Tk 1 billion was disbursed in cash immediately, while the remaining amount was withdrawn in the following three months.
Arif Hasan, chairman of Hasan Telecom, is also the managing director of Desh Television, while its director Alamgir Jahan is also an official of the channel. The loans were withdrawn by Arif Hasan and others.
According to the bank sources, the loans were intended to purchase broadcasting equipment, but it was used for different purposes. The bank also waived Tk 220 million in interest for the company.
According to a Bangladesh Bank report, Tk 640 million of the loans was directly deposited into accounts of Sikder family members, associates, and their companies, including Power Pack and Sikder Real Estate.
The same people opened a company called Broadway Real Estate on 25 September, 2019 and sought Tk 4.9 billion from the same branch, apparently to repay the loans of Hasan Telecom. The bank later approved the loan for constructing a 16-storey building in Rayerbazar. However, the project was never initiated.
Of the fresh loans, Tk 3.61 billion was used to clear Hasan Telecom’s loan, with the remainder transferred to various individuals, including Arif Hasan.
According to documents, Broadway Real Estate has since defaulted on its loan, which has grown to Tk 6.68 crore with interest. Having failed to recover the loan, the National Bank has labeled it a 'willful defaulter' and informed the central bank for further action.
Meanwhile, they opened a bank account under the name of a company called Prakriti Associates on 25 August, 2019, and sought Tk 600 million from the bank’s Mohakhali branch, to supply broadcasting equipment to Gazi TV, Maasranga TV, NTV, and BanglaVision. In documents, the company is mentioned to be owned by Sharif-uz-Zaman, who is also an official of Desh Television. The loan was approved on 15 September, and the entire amount was withdrawn immediately.
In October, another Tk 20 crore loan was approved and disbursed in the same fashion. Since then, the entire loans have been unpaid. The National Bank noted in its report that Arif Hasan was the actual beneficiary of the loans.