Tk 300m embezzled through ‘fictitious’ potato exports

Antara Corporation emerged as the third top exporter of potatoes in 2020, with an export volume of 15,588 tonnes, worth around Tk 370 million, through 96 consignments, according to the National Board of Revenue (NBR).

But the Chattogram Customs found in an investigation that Antara Corporation had not exported even a single potato. Rather, the company submitted fake export documents and received cash assistance of Tk 75 million from the government.

The customs authorities learned about at least 10 fraud companies, including Antara Corporation, that tricked Tk 300 million out of the state treasury without any exports. In fake documents, the companies claimed to have exported potatoes worth Tk 1.64 billion ($19 million) in 422 consignments, mostly between the fiscal year 2018-19 and 2021-22.

The Chattogram Customs authorities submitted its investigation reports against the 10 fraudulent exporters in October and November last year and are still looking into 48 suspected exporting entities. The customs officials are hopeful that more frauds and embezzlements will come to light once their investigations are completed.

Badruzzaman Munshi, deputy commissioner of the Chattogram Customs, told Prothom Alo that some 20 customs teams are investigating the frauds and also filing cases against the fraudulent exporters.

Why have potatoes been chosen to embezzle money? He, in response, said the ring might have considered potatoes as comparatively less risky due to the prevailing 20 per cent government assistance for its exports.

The government provides cash assistance to promote exports of unconventional commodities. As per the Bangladesh Bank circular, the traders are receiving government assistance against exports of 43 commodities in the current 2023-24 fiscal year, and potatoes are among the highest 20 per cent cash assistance receiving commodities. It stipulates that the government provides a subsidy of Tk 20 in the export of potatoes worth Tk 100.

According to the Export Promotion Bureau (EPB), potatoes amounting to Tk 4.37 billion ($58 million) were exported in the fiscal year 2020-21. Almost 90 to 95 per cent of potatoes are exported through the Chattogram port, following a test at its Plant Quarantine Station.

However, a huge discrepancy was found between the export data of Chattogram Customs and the Plant Quarantine Station. For instance, the NBR registered exports of 196,455 tonnes of potatoes after clearance at the Chattogram Customs, but the quarantine station provided export certificates for only 51,445 tonnes of potatoes.

The difference between the two entities’ export figures from FY19 to FY22 stands at 59 per cent. Individuals associated with the process said the 59 per cent of exports do not exist in reality, while the Chattogram Customs found 37 per cent of potato exports in FY21 to be fictitious.

Mohammad Shah Alam, deputy director of the Plant Quarantine Station, ruled out the possibilities of miscalculation at their side, saying, “Before loading containers with potatoes, we test samples and provide phytosanitary certificates. There is no risk of error.”

The Chattogram Customs officials encountered various surprising anomalies during their investigation into the export frauds. The fraudsters used the accounts and passwords of customs officials to include their fictitious exports in the export database. They even used the signature of a deceased official in the process.

Apart from Antara Corporation, Ruchikar Agro Food Products received an export assistance of Tk 11 million from the government, while Touch Trade International received Tk 38 million, TASA World BD Expo Tk 35 million, Majestic Enterprise Tk 13 million, MB Agro Food Products Tk 44 million, Miyaji Food Products Tk 50 million, MR Trading International Tk 21 million, Kashmeri Agro Food Tk 4.5 million, and Afan Food received Tk 9.1 million.

According to the investigation report, the fake export data of Antara Corporation was incorporated into the NBR database, using the custom officials’ accounts and passwords. In the export documents, they even used the signature of a customs official, some 22 days after his death from coronavirus.

The investigators found Antara Corporation to have received $4.7 million in export earnings through the banking channel during the period, without exporting anything. Questioning the earnings, the investigators suspected that the fraudsters might have brought the laundered money back through the process. It not only whitens their undeclared money but also adds 20 per cent cash assistance.

Mushtaq Khan, owner of the Antara Corporation, was not present at his office in the capital’s Motijheel area (sixth floor, building no. 12-13) around 3:00 pm on Monday. An official of the company arranged an over-the-phone conversation between this correspondent and Mushtaq Khan.

Asked about the allegations, Mushtaq Khan binned the Chattogram Customs’ allegations and termed them baseless. He claimed to have brought the earnings through actual exports. Regarding the signature of a deceased customs official, he said the customs authorities could explain it better as he was unaware why and how the customs did this.

The investigation found the $3.25 million exports of Miyaji Food to be fictitious. During a conversation at its office in the capital's Motijheel area on Sunday afternoon, Miyaji Food owner Mamun Miyaji rejected the investigation report and asserted that there is no scope to receive cash assistance without any exports.

He further said that he currently does not export any products but is trying to import different commodities, including fruits, onions, and ginger.

Afan Food, another exporter in question, was not found at the address mentioned by them. During a visit to the address at Motijheel, a security guard said the company no longer operates from the building.

The fictitious consignments of potatoes were mostly destined for the United Arab Emirates (UAE) and Malaysia. In FY21, some 64 per cent of fictitious exports went to the UAE, while around 25 per cent to Malaysia.

Individuals concerned said the UAE emerged as the new destination for laundered money. According to the Dubai Chamber of Commerce, Bangladeshi nationals own a total of 10,975 companies in the UAE. There are allegations that a number of people launder money through overseas trades with their shell companies in the UAE, and the same is applicable for Malaysia.

Thus, the consistent cash assistance is being embezzled, doing little to promote exports.

Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD), said such incidents are providing a wrong message regarding the overall exports of agri products.

“Adding names to the documents without any exports indicates the abundance of potatoes in the country. Such information may adversely affect the fair market management system,” he said, underscoring the need to contain such incidents through actions against the responsible people.

* Arifur Rahman and Ahmadul Hasan from Dhaka contributed to this report. It first appeared in the print version of Prothom Alo and has been rewritten in English by Misbahul Haque