The country's banking sector has been plagued by yet another scam as state-owned Janata Bank has provided loan and banking facilities worth Tk 55 billion to a single borrower in six years.
Benefitted from such 'facilities' beyond legally permissible limit, Md. Yunus (Badal) has emerged as the owner of 22 enterprises during the Awami League regime, reveals an investigation.
This Janata Bank episode is found to be the biggest loan scam involving one person who was blessed with patronisation of more than one minister, and ruling party union leaders.
This, say bankers, is also another major case of swindling public money deposited with banks after the Sonali Bank's Hall-Mark and BASIC Bank loan scams, thanks to the nexus of powerful people.
The Hall-Mark loan fraud involved more than Tk 40 billion and BASIC Bank loan scam was worth Tk 45 billion. Also, in the world's largest cyber heist in 2016, the country lost US$81 million of Bangladesh Bank's foreign exchange reserve money deposited with New York's Federal Reserve Bank.
The Janata Bank client, Yunus (Badal), cannot repay the loan now, bank managers told Prothom Alo.
Investigations confirm that the Janata Bank's boards of directors, appointed by the government, had disbursed the disproportionately high amount of loan from one particular branch, exhausting its capacity to disburse loans to other clients.
Immediate past chairman of Janata Bank Sheikh Md. Wahid-Uz-Zaman denied his involvement in the loan disbursement. "They sought more loans in favour of various organisations but I did not endorse these. The major part of this loan was disbursed during the tenure of the previous chairman," he told Prothom Alo.
Wahid-Uz-Zaman's predecessor and an economics professor at Dhaka University Abul Barkat said, "His (Mr Badal's) companies are very good. They also repaid properly. They don't belong to one person as documents show. That is why they received such amount of loans."
Bakat's name is mentioned as a patron by a few sources.
The investigation finds that the client neither paid the dues of letters of credit opened for importing raw materials nor repaid the cash capital taken for running day-to-day activities of the companies.
Yunus Badal is the managing of Anontex Group, the mother company of most of the entities that received the loans. The group's main business are manufacturing of textiles products and exporting readymade garments.
"As many as 22 companies were set up with the entire money. And they are of international standard," Yunus Badal said while talking to Prothom Alo at its office.
Janata Bank is now concerned about the loan
Official documents show, Anontex Group opened its loan account with the Shantinagar branch of Janata Bank in 2004 and due to its capacity constraint to pay higher amount, it was transferred to Janata Bhaban corporate branch in 2008. Disbursement of huge amount of loans for the new companies of Yunus Badal began in 2010 and most of the said loans were disbursed at random between 2010 and 2015.
Only Sonali Bank's Sheraton Hotel branch disbursed an abnormally high amount -- Tk 35 billion -- to Hall-Mark Group in 2011, a scam that put the state-owned bank in peril.
Manager of the Janata Bank corporate branch since March 2017 Ahmed Shahnur Rahman said, "The branch has lost all its capacity to disburse loans. We're now running after the client to recover the money."
Janata Bank can at best disburse loans amounting to Tk 7.5 billion or 25 per cent of its paid-up capital worth Tk 29.7 billion to single client, according to rules. The loan disbursed to Yunus (Badal) is double the capital.
Former governor of Bangladesh Bank Salehuddin Ahmed observed that the bank's huge exposure to a single borrower put it at risk. "The central bank may look into the entire matter to ascertain why it happened," he added.
The central bank had in 2015 approved a proposal for restructuring of Tk 19 billion of the Anontex Group. Despite non-repayment of loans still, the bank's board of directors last year gave the group special loan facilities and also rescheduled the loans.
Managing director of the bank between 2008 and 2014, SM Aminur Rahman, denied his involvement in approving the loans. "The proposal came from the branch and the board endorsed it," he said.
Abdus Salam Azad, the corporate branch manager between 2011 and 2013, who is now the managing director of the Janata Bank, said claimed that no significant amount was disbursed during his tenure. He, however, mentioned that the Anontex authorities have been advised to reduce their loans, going to other banks to repay the money.
The bank's board of directors, on 17 January, asked the Anontex Group to approach other banks to clear the loans.
Asked about this, Yunus Badal said his group was facing 'a bit of financial difficulties' as the Janata Bank stopped financing it. Eight of his companies are trying to arrange loans from other banks and he is optimistic that everything would be normal by next June.
"A senior ‘brother’ at the Bangladesh Bank is looking after the matter. He raised no objection to the loan," said Yunus Badal.
Sources in the bank said he has donated huge sum of money to a trust fund floated by union leader Rafiqul Islam who is constructing a mosque in Gopalpur, Tangail. Rafiqul Islam said Yunus Badal is providing tiles worth Tk 1 billion while the Anontex owner said the amount would be Tk 250 million maximum.
Former deputy governor of Bangladesh Bank Ibrahim Khaled wondered how the bank gave more than Tk 50 billion to a single borrower. "Definitely there are big fish behind such an act. The central bank has proved its failure in dealing with this. So, financial intelligence and ACC must be engaged to dig out the truth."
*This report, originally published in Prothom Alo print edition, has been rewritten in English by Khawaza Main Uddin.