Tk 210b plundered from 2006 to 2021

In 2006, Bangladesh Bank ordered Jubok to shut its operation on allegation of illegal banking and pay back its customers. But the firm returned no money.

Locals said lenders came to Dipak Dutt’s house every day and shouted at him demanding the money. Since he couldn’t bear the burden, Dipak Dutt hanged himself on 30 April 2012.

Jamal Hossain, a friend of Dipak Dutt, told Prothom Alo one day Dipak's wife left the area because of the pressure from lenders and no trace of has been found of her since.

A total of 280 firms, including e-commerce and multilevel marketing (MLM) companies, cooperative societies and the likes of Jubok, plundered at least Tk 21.017 billion (21,017 crore) in the last 15 years. Lavish profits and discounts were offered to customers in all cases.

The figure of this embezzled money was assessed by putting the records of Bangladesh Bank, Jubok Commission, a probe body working on Jubok scam, law enforcement agencies’ investigations and clients’ claims together.

Jubok plundered Tk 26 billion (2,600 crore) in 2006, Unipay2u Tk 60 billion (6,000 crore) in 2011, Destiny Tk 50 billion (5,000 crore) in 2012 and 266 cooperative societies misappropriated Tk 41 billion (4,100 crore) from 2008 to 2017.

Other than this, allegations surfaced in 2021 as 11 firms are not returning money to their clients Eorange plundered Tk 1.1 billion (1,100 crore) from its dealers and customers, Evaly Tk 10 billion (1,000 crore), Dhamaka Tk 8.03 billion (803 crore), SPC World Tk 1.5 billion (150 crore), Ehsan Group Tk 11 billion (110 crore), Nirapod.com 80 million (8 crore), Chalantika Tk 310 million (31 crore), Supom Products Tk 500 billion (50 crore), Rupsha Multipurpose Tk 200 million (20 crore), New Navana Tk 300 million (30 crore) and QWrold Marketing embezzled Tk 150 million (15 crore) of the customers.

Currently, the police’s Criminal Investigation Department (CID) is investigating allegations of money laundering against 15 e-commerce firms. Most of them face charges for not delivering products to customers, not returning the money, not paying the suppliers and their cheques bouncing.

Cases have been filed for embezzlement of money in the past one and a half decades from time to time. The accused in several cases have gone into hiding, several accused have been arrested while the accused in several cases have been behind bars for long. But it is the customers who never received any refunds.

The scam of Jubok came to the light in 2006. Its depositors said the company owns huge amounts of property and land. Various programmes were held, demanding the sale of Jubok’s property to pay back the customers. Nothing has happened in 14 years.

Mahmud Hossain, secretary of Janakalyan Society, a platform of the customers duped by Jubok, told Prothom Alo they appealed to the prime minister’s office to appoint an administrator to arrange payment of Jubok’s clients. The finance ministry was also ordered to take steps in the matter. The finance ministry gave permission to appoint an administrator and instructed the commerce ministry to take necessary steps. Letters had been exchanged for two years but nothing worked, he added.

The e-commerce scams took place openly on digital platforms. Firms opened their websites and lured customers with big discount offers on products and minted money. They conducted transactions through banks and mobile financial services (MFS). The government agencies allegedly couldn’t intervene on time.

E-commerce platform Evaly started operations in December 2018. Since its inception, the beleaguered company began selling products at a price much lower than market prices announcing various offers and people rushed to place orders. The Directorate of National Consumers' Right Protection, however, received complaints about failure to deliver products and delays in delivery.

Like Evaly, many other firms started selling products at surprising discounted rates. But no government agencies tried to look into the suspicious business strategy of these companies.

Media reported on several e-commerce firms’ suspicious business strategies in August 2020. The commerce ministry then took notice, forming a committee and sending letters to various government agencies and then probes began.

Banks were ordered to freeze the accounts of Evaly for a month though the firm continued its business. The Bangladesh Bank on 18 June, in a report to the commerce ministry, said the liabilities of Evaly stood at Tk 4.03 billion (403 crore) against its current assets worth Tk 650 million (65 crore) as of 28 February this year.

Lastly on 16 September, Evaly chairman Shamima Nasrin and managing director Mohammad Rassel were arrested in a fraud case filed by an aggrieved customer.

Quoting Mohammad Rassel, Rapid Action Battalion (RAB) said the liabilities of Evaly now stood at Tk 10 billion (1,000 crore) but the firm had Tk 3 million (30 lakh) only in its bank accounts and Tk 300-350 million (30-35 crore) with online payment gateways. Rassel told RAB he didn’t know how he would settle such huge liabilities.

People concerned said it the government had taken necessary measures on the matter of selling products with huge discounts from the beginning, the present predicament would not have been arisen. And, those who were responsible for monitoring did not carry out their duty properly.

Md Zafar Uddin was the commerce secretary during the peak of the e-commerce firms’ suspicious business. He had been in office from September 2019 to June this year. Speaking to Prothom Alo, he said, “I have gone on retirement and I can’t talk about e-commerce.”

Following the media reports, the Competition Commission began investigating into the suspicious business of the e-commerce platforms and found discrepancies. A statement in the commission’s website stated an official was tasked with investigating into Evaly’s abnormal discount on sale in August 2020. The report by the official found Evaly violating the competition law in several aspects. After that, a case was started.

Mofizul Islam, chairman of Competition Commission, told Prothom Alo, “We have filed a case against Evaly at our own initiative and the trial is on.”

People concerned have said that, had the Competition Commission acted against the violation of the competition law from the beginning, e-commerce firms would not have been able to plunder billons of taka, luring customers with huge discounts.

The government agencies always take initiative after the e-commerce companies and other firms like Jubok, Destiny, Unipay2u and cooperative societies pocket huge sums of money from the people. They do not become do anything beforehand.

The Anti-Corruption Commission filed two cases against 53 including Rafiqul Amin, managing director of Destiny Group Limited, separately after the allegation of money embezzlement surfaced in 2012. Not a single case has been settled and Rafiqul Amin has been behind bars since 2012.

According to a report of Bangladesh Bank, Destiny collects more than Tk 50 billion (5,000 crore) from about 4.5 million (45 lakh) customers. Speaking to Prothom Alo, Mosharrof Hossain, coordinator of Destiny’s investors, claimed the MLM firm owns properties worth over Tk 120 billion (12,000 crore). Despite having such huge properties, customers are not being refunded due to lack of proper initiative.

Police filed a case against 40 people including Jubok’s chairman Abu Mohammad Sayed in 2014. The case was transferred to the ACC later. The CID is now in charge of investigation though the probe is yet to finish. No charge sheet was also submitted, and all accused are out on bail now.

Unipay2u started collecting money from people in October 2009 promising a double return in 10 months. Depositors said 600,000 investors kept Tk 60 billion (6,000 crore) in Unipay2u. No one got a refund. Six people, including managing director Unipay2u Md Muntasir Hossain, were sentenced to various terms in a case filed by the ACC. Muntasir Hossain is now behind bars.

According to a 2017 report of the Department of Cooperatives, 266 cooperative societies disappeared with about Tk 41 billion (4,100 crore) between 2008 and 2017.

Nabirul Islam, joint registrar (audit and law) at the Department of Cooperatives, told Prothom Alo no joint report was prepared after 2017. The ACC has been investigating various allegations of more than 300 cooperative societies registered with the department.

The ACC asked the Department of Cooperatives to take action against 266 cooperative societies and the department has taken punitive action against the people concerned, he added.

People concerned said clients did not get their money back and more allegations were unfolding. RAB arrested the chairman of Ehsan Multipurpose Cooperative Society, Ragib Hasan, on 10 September. Ehsan Group allegedly plundered Tk 1.1 billion (110 crore) from clients and society’s members.

Akteruzzaman from Pirojpur claimed to make a savings worth Tk 850,000 at Ehsan Multipurpose Cooperative Society. He told Prothom Alo on 13 September the cooperative society has paid them no money for two years.

Executive director of Transparency International Bangladesh (TlB) working on prevention of corruption, Iftekharuzzaman observed those who cheated clients must be held accountable through legal process. The legal structure of the country is strong enough.

He told Prothom Alo though the laws exist, but these were not enforced. That is why clients never get back their money.

Regarding the plundering of customers’ money in the name of e-commerce, Iftekharuzzaman said if the government ensured monitoring, control and accountability, today’s pitiful situation would not have emerged.

This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Hasanul Banna