Sadharan Bima Corporation: 10 yrs of fraud, Tk 260m misappropriated
A certain group has misappropriated Tk 261.5 million (Tk 26.15 crore) from the state-run Sadharan Bima Corporation (SBC) by opening a bank account. Led by the head of audit and compliance department at SBC’s head office, Abul Kashem, the scam had continued for 10 years and six months but the insurer was in the complete dark about it.
A report by a four-member committee, headed by SBC deputy general manager Khosru Dastagir Alam, revealed the embezzlement. The report said an account was opened at Exim Bank in 2010 on behalf of SBC. Tk 277.8 million (Tk27.78 crore) has been deposited in it to date and Tk 261.5 million (Tk26.15 crore) was withdrawn. It was the premium insurance money of Bangladesh Power Development Board (BPDB), Bangladesh Council for Industrial and Science Research (BCSIR) and Bangladesh University of Engineering and Technology (BUET). Abul Kashem personally opened the bank account without the SBC’s approval with the motive of embezzling and laundering the money. He is on the run now.
Abul Kashem was the manager of SBC’s New Market branch in 2019-10. Though there were many banks near New Market, he opened the account considerably far away at Exim Bank’s Imamaganj branch. The report said Abul Kashem submitted a fake letter to open it. Abul Kashem informed branch manager at the time, Musa Ahmed, that a decision has been taken at the 492nd meeting of the SBC’s board of directors on 20 January 2010 to open a current account at the Exim Bank’s Imamaganj branch.
Opening an account for a company requires at least two signatories. So, certain Rafiqul Islam was shown as the deputy general manager (DGM) of account department at the SBC’s head office to open the bank account. SBC keeps short term deposits in banks. But Abul Kashem opened a current account. The report said Abul Kashem obviously cheated the board of directors since the board did not take any such decision and there was no one named Rafiqul Islam at the SBC.
Musa Ahmed has now been promoted to vice president. He told Prothom Alo “We did not suspect anything as there was no lack of documents.” He didn’t make any further comment.
How the money is misappropriated
Power Division, BSCIR and BUET have received various products under more than a hundred projects for 10 years with marine insurance premium. Importers receive compensation under marine insurance, if cargo ships sink in the sea while carrying goods from a foreign port to a port in Bangladesh. If cargo vessels arrive in the country, the insurance becomes ineffective. Usually vessels don’t sink. So, the ring of fraudsters led by Abul Kashem took advantage of this.
If any premium money is deposited at the bank account through any SBC branch, then it automatically adds to the main account at SBC’s head office. But money was withdrawn from Exim Bank’s Imamaganj branch month after month. The bank should have questioned the withdrawals from the account of a state organisation in such way. The incumbent manager of Exim Bank’s Imamaganj branch, MD Abdur Razzaque raised no question about it. Abdur Razzaque told Prothom Alo, “If a cheque arrives, we look at whether the name of the organisation and the signature match. Besides, the cheques of this account were regularly arriving after being cleared. So, I suspected nothing.”
Where the money goes
Records of the past 10 years and six months from 1 April 2010 to 5 October 2020 shows, Tk 100 million (10 crore) has been withdrawn in the first seven year till 2017 and more than 160 million (16 crore) in the last three years.
Abul Kashem’s wife Nasrin Akter owns a company named M/S Shumi Traders. A portion of the money has been deposited in this company’s account at Social Islami Bank’s Uttara branch. A large amount of money has been transferred to the accounts of Uttara Housing Limited and a certain Mizanur Rahman.
Besides, money has been transferred to the accounts of the people and the companies having shared interests with Abul Kashem at AB Bank and BRAC Bank's Cumilla branches, City Bank's Kakrail branch, Bank Asia's Scotia branch and Exim Bank's Elephant Road and Motijheel branches. Abul Kashem has an investment worth 15 million (1.5 crore) at the SBC-owned SBC Securities and Investment.
The managing director of Uttara Housing Limited, Md Mosharof Hossain told Prothom Alo, “Several people including Abul Kashem invested in our plots. I have no knowledge about the source of the money.”
Abul Kashem is from Krishnanagar village of Cumilla’s Kotwali upazila. At present, he resides in Uttara. He owns two flats on Road 14 and 16 at Sector 6. His phone was found switched off and he did not respond to an email requesting comment either.
Several days ago, Prothom Alo went to Abul Kashem’s flats to talk to him, but they were stopped by the gatekeeper Zahiruddin. The gatekeeper said Abul Kashem does not reside at the flat but his wife Nasrin Akter lives here. When they wanted to talked to her through intercom. The gatekeeper said, “Madam said that she is ill so she won’t talk.”
Who are the members of the ring?
Though the probe report did not reveal it but Prothom Alo investigation found that Abuul Kashem did not carry out the entire work alone. Several employees of banks, Power Division, BSCIR and BUET are involved. This correspondent talked to the employees of these three organisations to know about how the embezzlement happened.
SBC asked BPDB to prepare bills on all costs including premium and value added tax to import any products. Then BUP’s procurement department sent letter to its finance department. After that, insurance department completed formalities with the accounts department and received the cheques. The insurance department gave cheques to the SBC. The insurance company then provided the policy documents, known as cover note.
Officials at the SBC said, the BPDB didn’t verify whether the SBC received the cheque. Abul Kashem himself received most of the cheques. Sometimes BPDB’s insurance department brought cheques to Abul Kashem.
Deputy director of BPDB’s insurance department, Rais Uddin had prepared the cheque and hastily sent his office assistant ABM Ashraful Haque to give these to Abul Kashem.
Speaking to Prothom Alo at the BPDB’s head office, Rais Uddin said, “Abdul Kashem pushed (me) for the cheque. He used to say that release of (imported) goods is not being possible.” ABM Ashraful Haque said, “I have worked according to the office order.”
This correspondent went to the office of the chairman of BPDB Belayet Hossain. He declined to comment, claiming he was busy. He just said he is aware of the event but it’s not the right time to talk.
A official of the BPDB, however, said the involvement of many people from SCB similar to the people from BUPB, is nothing surprising.
What has SBC done?
Why the SBC couldn’t find the misappropriation albeit it had continued for many years remains a mystery. Regarding this, managing director of SBC Syed Shahriyar Ahsan told Prothom Alo, “Since it was a personal fraud, SBC had no way to find it. However, we didn’t delay to take action after finding out about it.”
SBC sent letters to BPDB on 28 November and BSCIR and BUET on 3 December asking them to provide premium bills, policy documents or cover notes, and money receipts.
Chairman of BCSIR Md Aftab Ali told Prothom Alo, “The entire incident is unbeleivable.”
Meanwhile, records of Exim Bank’s Imamaganj branch show, name of the joint signatory with Abul Kashem is Md Rafiqul Islam; national identity (NID) card number 2699503517932; profession ‘services’; post: deputy general manager.
The probe team of SBC suspects that Abul Kashem himself used the name Rafiqul Islam using someone’s photo. The person in this photo is unknown to them. After verifying at the Election Commission, the NID numberwas found to be fake.
Hearing the entire event of fraudulence and misappropriation, executive director of Transparency International Bangladesh Iftekharuzzaman said it was shocking. “Abul Kashem might be the mastermind. However, it can be understood easily that members of the ring are from the three organisations including SBC, BPDB and the banks.” Iftekharuzzaman advised seizing the properties of Abul Kashem and taking action against other people involved, after investigations.
This report appeared in the print and online edition of Prothom Alo and has been rewritten for the English edition by Hasanul Banna