Tk 6.8 billion lost in irregularities

Many officials of the Palli Daridro Bimochon Foundation (PDBF), which was established to alleviate poverty in rural areas, have been accused of being involved in corruption and irregularities instead of working on eradicating poverty. They have been accused of embezzling loan money with fake documents, purchasing low quality products at higher prices without calling any tender and depositing money of the organisation to agencies of their choice instead of banks.

A special study conducted by the Office of the Controller General of Accounts (CAG) cited 16 types of financial irregularities in the PDBF, which runs under the Rural Development and Cooperative Division. It said around Tk 6.08 billion was lost due to these irregularities.

The CAG office prepared the study report on the PDBF analysing the accounts of the 2017-18, 2018-19 and 2019-20 fiscals. It said the irregularities came as a result of the flaws in the management and not following the financial provisions properly.

The agency has been accused of several serious irregularities, including not abiding by the Public Procurement Rules (PPR), not maintaining the laws of the country and its own rules and irregularities in the collection and deposition of government money as well as the money of the organisation itself.

The independent non-banking financial agency was established in 1999 under the rural development and cooperative ministry.

Depositing money to financial institutions instead of bank

According to the laws of the PDBF, the money from the fund must be deposited in the name of the foundation to the banks chosen by the board.

Former managing director of the PDBF Madan Mohan Saha, who retired from the agency in July 2019, deposited a total of Tk 433.4 million to several financial institutions, including the International Leasing and Finance, Premier Leasing, Reliance Finance, Phoenix Finance and Union Capital, instead of any scheduled bank.

A case has been filed against Madan Mohan and two other officials of the organisation over this incident. Former PDBF managing director Aminul Islam was the plaintiff in the case. However, the court dismissed the case last September. The money could not be retrieved either.

Speaking regarding the case, Aminul Islam told Prothom Alo, “I lodged the case on the decision of the board. It’s unbelievable that the court dismissed the case. The incumbent authority has not appealed against the court order dismissing the case either. This move to remain silent is highly suspicious.”

Payment cleared without receiving the product

Contracting firm Lajuk Electric Company Limited was given the work order to purchase solar home systems under the ‘Solar Energy Project’ of the PDBF in May 2014.  A bill of Tk 5.67 million was paid to this contracting firm without getting any product from them. PDBF officials in Shyamnagar, Kaliganj and Ashashuni upazilas had informed the head office in writing about not getting the supply of solar home systems from the contractor.

Speaking regarding this, the then acting solar officer in the Ashashuni upazila Aminur Rahman told Prothom Alo, “We didn’t receive any solar system in Ashashuni. We also had informed the head office about this in writing, but there was no response.”

Prothom Alo tried to reach Lajuk Electric Company Limited over the phone for its comment on the allegation, but the number was found switched off.

Purchasing at higher prices

The PDBF installed solar panels in the areas formerly known as conclaves.  Although the market price of five lights specified by the Infrastructure Development Company Limited and a fan is Tk 17,936, it was purchased at a rate of Tk 39,500 by the PDBF officials, which led to a cumulative loss of Tk 58.4 million in three consecutive fiscals from 2017-18.

At the same time, the PDBF signed a deal without calling any tender and approval from the board of directors. Solar systems worth Tk 888.4 million were purchased at a rate at least 20 to 25 per cent higher than the market price through 158 work orders. As a result, the PDBF incurred a loss of Tk 222.1 million.

A total of 8,379 solar systems were purchased over three years and 95 per cent of them were out of order or of low quality product. As a result, the PDBF incurred a loss of Tk 172.2 million in this project.

Speaking to Prothom Alo, senior upazila poverty reduction officer in Pirojpur Niloy Mistri said they could not provide the service to customers due to the low quality of the product. Later, the people involved in the solar project removed it.

Supplying used and out of service products

A total of Tk 77 million was withdrawn under the solar project by supplying out of order and old panels, which was deposited to the bank accounts of PDBF additional director Shahid Hossain and his nephew Saiful Islam.

PDBF sources said Shahid Hossain has been promoted as the director of field operations of the agency and his nephew Saiful Islam is the assistant accountant at the PDBF office in Sherpur.

Shahid Hossain’s phone was found switched off when this correspondent tried to reach him for his comment regarding the allegations against him.

Huge default loans

According to the PDBF laws for loans, the loans provided by the foundation must be recollected in 49 weekly instalments. Analysing the documents of the agency’s loan collection and distribution, it has been found that the PDBF has a default loan of Tk 2.18 billion to some 609 borrowers.

The authorities concerned say the amount of default loans increased due to non-collection of loans in the three months from April to June in 2020 during the coronavirus pandemic. However, according to the CAG office, this is a long due.

423 recruitments forging results

In 2017, some 727 were recruited in the PDBF against a total of 304 vacant posts of field organisers without the approval of the board and the recruitment committee by forging the recruitment exam results.

There are allegations that the member secretary of the recruitment committee and former acting joint director of the PDBF Shafiul Islam manipulated the results of the 24 job aspirants. The PDBF incurred a loss of Tk 444.4 million due to this abnormal recruitment.

No action against the embezzlers

PDBF field organisers Anup Kumar Das, Khairul Alam Khan, Promod Ranjan Dey Sarker, Alok Nath and Jitendra Nath together embezzled some Tk 3.14 million. However, instead of taking actions, the then PDBF managing director Madan Mohan and joint director Shipra Chakrabarty favoured them.

There are allegations that, poverty reduction officer in Kishoreganj Sadar upazila Chhabi Rani Roy and field officer in Kalia upazila of Khulna misappropriated Tk 3.2 million and Tk 900,000 respectively from the money allocated for loans. A case was filed against Chhabi Rani, who was later found guilty and was ordered to return Tk 3.13 million. A decision was also taken to remove her from the job had she failed to act as per the order.

It has been learnt from the sources relevant to the investigation that former MD Madan Mohan settled the case on the basis of a backdated appeal from Chhabi Rani going beyond his jurisdiction.

The former PDBF MD also cancelled the punishment of other accused of the case. Chhabi Rani now works at the PDBF head office. Her husband Tapash Kanti Chanda is the incumbent CBA president of the PDF.

Statement from the authority

This correspondent made a contact with the current PDBF managing director Moududur Rashid Safdar after trying for three months. Speaking to Prothom Alo over the phone, he said, “Efforts are on to retrieve the money stuck at the International Leasing and Finance. We have taken the initiative to take legal steps in this regard.”

PDBF governing body chairperson and senior secretary at the Rural Development and Cooperative Division Mosammat Hamida Begum told Prothom Alo that she was unaware of such a vast level of irregularities. Actions will be taken after verifying the related documents.

People involved must be brought to book

Transparency International Bangladesh (TIB) executive director Iftekharuzzaman termed the irregularities that came up in the CAG report as institutional corruption.

He told Prothom Alo, “Such level of corruption, embezzlement and irregularities from the officials of an agency which has been given the responsibility of poverty alleviation is not expected. These people involved in the corruption must be identified and accountability must be ensured. Otherwise, these corrupted people will become more reckless.”

* This report appeared on the print and online versions of Prothom Alo and has been rewritten in English by Ashish Basu