The timeline of Basic Bank scam
Prothom Alo infographic

September 2009 is viewed as start of the country's financial sector scams. On 6 September that year, the boards of directors of state-owned banks were reshuffled. Second and third ranking leaders, activists and supporters of Awami League, newly installed in government, were appointed chairmen and directors of commercial banks. There was an exception. This was Jatiya Party's mid-ranking leader Sheikh Abdul Hye alias Bachchu. He was made chairman of BASIC Bank.

The banks were basically used at the time to accommodate those who had been deprived or defeated in the election, or who had aspired for various posts and positions. Then came the Sonali Bank Hall-Mark scandal, Janata Bank's Bismillah Group scandal and other incidents of massive misappropriation of money.

However, BASIC Bank exceeded all other scams. A total of Tk 45 billion was looted from this bank. And yet the main player in this scam, Sheikh Abdul Hye, remains living a life of luxury and leisure. The Anti-Corruption Commission (ACC) has created this scope for him.

All the inquiry reports of the various agencies held Sheikh Abdul Hye responsible for the BASIC Bank fiasco, yet ACC still doesn't find his complicity in the scam. The court has raised the issue several times too, but Sheikh Abdul Hye remains untouched. He has a strong backing, very strong.

His clout

BASIC Bank was established in 1989. After it was established, it was the industries secretary by virtue of office who was made chairman of the bank. And government officials of different levels were appointed as directors of the board. BASIC Bank was an example of how well a bank could run under state ownership. But things changed in 2009 after Awami League came to power. Policies were changed and politicians, businessmen and retired civil servants were appointed to the bank's board. Things went downhill from then.

Sheikh Abdul Hye was a Jatiya Party leader in the eighties. In the fourth national parliamentary election held in 1988, he was elected member of parliament from the Bagerhat-1 (Chilmari, Mollahat and Fakirhat) seat. His highest political post was president of the Jatiya Party Bagerhat unit. He lost in the 1991 national election.

The fact that he was appointed as BASIC Bank chairman is evidence of his powerful backing. After taking over the helm of the bank, he committed one misdemeanour after the other. Misappropriation of BASIC Bank money began. The looting of the bank funds took place in front of everyone, but no one could stop it. Discussions and reports started from 2012 on the fraudulence that was taking place in BASIC Bank.

While the finance ministry and Bangladesh Bank were sending letters to each other in this regard, Sheikh Abdul Hye's term as chairman of the bank was extended by another two years. A former joint secretary of the government, AKM Rezaur Rahman, was a director of the bank at the time. In a letter written on 11 July 2013 to the secretary of the banking and financial institution division, he said, "He does not bother about anyone expect one person."

In August 2013, Bangladesh Bank sent the finance ministry a detailed letter about the irregularities, fraud and corruption of BASIC Bank. The letter said, "It seems that the bank's loan discipline has completely broken down. No such decision-making processes have been taken by the boards of any of the 40 local scheduled banks. This is the responsibility of the board of directors."

Even then the finance ministry remained silent. Then on 29 May 2014 Bangladesh Bank recommended that BASIC Bank's board of directors be dissolved. However, no action was taken. But things worsened when, on Friday, 6 July 2014, Sheikh Abdul Hye went to finance minister Abdul Mal Abdul Muhit's house and tendered his resignation. In other words, Abdul Hye was given the scope to resign with all dignity and respect. That is why Sheikh Abdul Hye cannot even be referred to as a dismissed chairman.

Though he was rather lenient towards BASIC Bank initially, the former foreign minister Abul Mal Abdul Muhith later started speaking out about Abdul Hye. On 8 July 2015, speaking to journalists at the secretariat, he said, "No matter how powerful he may be, the BASIC Bank former chairman Abdul Hye Bachchu will have to face the law. There is ample proof of his activities outside of the bank. It will be no problem now to take action against him." But the finance minister could not keep his word. Later, standing in parliament, the finance minister said, "People within our own party are an obstacle to nabbing the frauds."

ACC finds nothing

From the very outset, Sheikh Abdul Hye openly indulged in all sorts of irregularities and corruption. In 2012, after inspecting the Shantinagar, Gulshan and Dilkhusha branches, Bangladesh Bank send a report to the finance ministry about various discrepancies. In 2014, the central bank's Bangladesh Financial Intelligence Unit (BFIU) sent details to ACC about Abdul Hye's bank accounts, how the deposits were made to these accounts and so on. It detailed how the funds looted from the bank went directly to the accounts of Abdul Hye and his brother Shahriar Panna.

The politically powerful are not punished for misappropriation of funds here. Only the small fish are caught and stuffed into jail. The others remain comfortable and free, becoming all the more powerful

While he was chairman of BASIC Bank, Sheikh Abdul Hye purchased a house for Tk 1.1 billion (Tk 110 crore) in Dhaka cantonment on a 1.5 bigha plot of land. BFIU even sent details to ACC about how so much money to buy such a big house came to Abdul Hye's bank account. Sheikh Abdul Hye, on his own accord, gave billions of taka in loans in various names, genuine and false, and took a large chunk from those loans as bribes. He used that money to buy the house.

In September 2015, ACC filed 56 cases regarding financial irregularities and corruption involving around Tk 45 billion (Tk 4500 crore) of BASIC Bank. There were over 100 persons accused in these cases, though Abdul Hye's name was nowhere.

Former manager of the bank's Shantinagar branch Mohammad Ali Chowdhury still languishes in jail because of one of these cases. In March last year, the High Court bench of Justice M Inayetur Rahim (presently a judge in the Appellate Division) and Justice Md Mustafizur Rahman, gave its verdict regarding his bail.

In the verdict, the court said, "Even though six years have passed, the commission has failed to finish the investigations. From the commission's deposition it is seen that as they failed to 'follow the money', it wasn't possible for them to complete investigations." The court found such an observation of the commission to be misleading. After all, complaints have been lodged under Section 409/109 of the Penal Code and Section 5 (2) of the Prevention of Corruption Act of 1947 regarding the criminal action.

"The focus of the investigation into this case should be whether through the bank officials or the bank accounts, the accused have criminally broken trust or taken up criminal misdemeanour. Having to 'follow the money' to identify its trail cannot be an essential or compulsory condition to prove the crimes.

"The cases are not under the money laundering act that the trail of the money has to be identified. It is natural that questions arises as to if the claim to be trying to follow the money is simply a means to delay the investigations and save the accused."

Who will shoot the looters?

The bail hearing of Shantinagar branch's former manager Mohammad Ali Chowdhury  was held on 8 November by the High Court bench of Justice Md Nazrul Islam Talukdar and Justice Khijir Hayat. The court told the ACC lawyer at the time, "The persons who looted the people's money from BASIC Bank must be brought under the law. Those who loot the bank's money, the people's money, misappropriate and siphon off these funds, are the enemies of the nation. There must be a speedy and summary trial of those who looted and misappropriated the money. Those who misappropriate people's money should be shot down as punishment. Though many years have passed, no charge sheet has been submitted on any of the cases. What is the reason that the investigations are incomplete? Will the investigations continue indefinitely?"

ACC will undoubtedly continue the investigations indefinitely. When there is patronage or political support, then no 'summary trial' or 'shoot out', the termed by the court, will be carried out. If fact, one is not even accused. So actually no one has the gumption to catch Abdul Hye.

Default-friendly government

China and Vietnam hand down harsh sentences on those aiding and abetting misappropriation of funds, loan defaulters and looters. In December 2019, the Chinese court passed the death sentence against Hengfeng Bank's former chairman Jiang Xiyun for misappropriating USD 110 million.

Similarly, death sentence was handed down in December 2018 to Bank of Inner Mongolia former chairman Yang Chenglin for taking USD 43 million in bribes, in 2010 to China Development Bank's deputy governor Wang Yi, and in 2005 to Bank of China-Hong Kong's former chairman Liu Jinbao. Three bankers were sentenced to death in 2014 in Vietnam.

One of them was an official of the state-owned Vietnam Development Bank. The bank incurred losses of USD 93 million because of him. In China, loan defaulters cannot even use credit cards, airline tickets are not sold to them and they cannot be the CEO of any company.

In Bangladesh it is the opposite. Here the defaulters receive all sorts of perks and facilities. That is why the late banker Khandokar Ibrahim Khaled would say, "It's a default-friendly government." It is because of this default-friendly environment that financial scams occur one after the other in this country.

When the Awami League government was formed in 2009, the default loans totalled around Tk 224.81 billion. That now has surpassed Tk 1.25 trillion. Other than the massive increase in default loans, over the past 14 years over Tk 500 billion has been misappropriated through various financial scams.

There is no record of how much money has been siphoned out of the country. The Washington-based Global Financial Integrity says that every year Tk 640 billion is transferred illegally out of Bangladesh on average.

The politically powerful are not punished for misappropriation of funds here. Only the small fish are caught and stuffed into jail. The others remain comfortable and free, becoming all the more powerful. So no matter what the court may say, those like Sheikh Abdul Hye really have no reason to worry at all.