A leather export company has used fake documents to withdraw Tk 10.75 billion from the state-owned Janata Bank, reveals an investigation.
Crescent Group, which owes Tk 27.6 billion to Janata Bank, allegedly managed to take away the money with the connivance of the bank officials and political elements in the bank board.
The entire amount was drawn from just one of the bank's branches, Imamganj Corporate Branch. And 98 per cent of this branch’s loans have been extended to Crescent Group for 98 per cent of its loans. The group has taken as much as Tk 51.3 billion from the bank and the government funds since 2013.
Janata Bank has also provided loans and banking facilities worth Tk 55 billion to a single borrower named Yunus Badal from a single branch, Shantinagar in the city, following exposure of the first major scam in the country's history, the Hall-Mark scam in 2011. Sonali Bank's Sheraton Hotel branch had disbursed Tk 35 billion to Hall-Mark Group.
In all these cases, the bank authorities also violated the Bank Companies Act, by exceeding the limit of disbursing a maximum of 25 per cent of the bank's paid up capital to a single borrower as loan.
In its report on investigation into the latest episode, the central bank said the group also siphoned off the money it took from the government's fund meant for cash incentives to exporters.
The group has allegedly kept abroad more than Tk 10 billion it earned through exports whereas it has become a loan defaulter of the bank.
Asked about the scam, the man who runs this group, MA Quader, blamed disconnection of power lines at his leather units for failure to shift tanneries from Hazaribagh in due time. "As a result, we could not bring Tk 12 billion from abroad and we are trying to do so. It may take up to two years," he told Prothom Alo on 15 July.
The Bangladesh Bank's investigation found that Crescent Group made exports to fake overseas organisations owned by Bangladeshis. Although it exported goods to Hong Kong, the bill has been sent to the US and the exporter has allegedly brought back money from the US and Dubai.
Quader argued that he exported goods to different destinations via Hong Kong.
As the central bank pointed out that the money has also been transferred elsewhere including the share market, real estate and insurance, the owner of the group claimed that he has formed 13 companies. "I have not misused the money. If I am given some time, everything will be fine," he said.
Abdus Salam, who was managing director of the bank till October 2017, claimed that major portion of the money was realised but certain preoccupations during the last days of his office and subsequent period created problems.
The former MD put the entire blame on the manager of the branch at that time, Mohammad Fakhrul Islam, who said, "Whatever has happened was done by the branch officials. I just carried out the orders given by the board of directors and the MD," he claimed.
Current MD Abdus Salam Azad admitted that none of the export bills could be recovered and the loans of the branch are classified ones.
Former principal secretary to the prime minister Wahid-uz-Zaman who was chairman of the bank after Dhaka University professor Abul Barkat, denied involvement of the board of directors.
The board of directors at that time included former Bangladesh Chhatra League leader Balaram Poddar, a central sub-committee leader of the ruling Awami League Nagibul Islam aka Dipu and AL nomination aspirant from Kalihati, Tangail, and Jubo League leader Abu Naser. Chhatra League is student front and Jubo League youth front of AL.
The bank's branch officials were also found to be beneficiaries of the scam.
In the meantime, the central bank has asked the Janata Bank to dismiss 10 officials and has suspended the licence of the Imamganj branch for foreign trade.
On repeated scams, former governor of the central bank Salehuddin Ahmed said since culprits of earlier swindlings have not been punished, such scams continue. "There has been a culture of impunity," he added.
* This report, originally published in Prothom Alo print edition, has been rewritten in English by Khawaza Main Uddin