Ex-chairman in thick of things
Former BASIC Bank chairman Abdul Hye Bacchu illegally influenced all activities of the state-owned lender, leaving the once-sound bank in a rickety state, revealed a report of Bangladesh Bank.
The central bank report, which also contains the findings of the observer deployed at the bank for stopping gross irregularities, outlined how the government-backed chairman abused his power to play an active role behind the loan scam.
As to whether BASIC directors were unlawfully involved in any administrative activities, loan sanction, write-off, interest waiver and rescheduling, the observer stated that the chairman "actively influenced every matter presented to the board".
In November 2013, the central bank felt it necessary to appoint the observer after the bank's board and management were found involved in serious anomalies. Eventually, the bank last year incurred a loss of around Tk 43.2 crore, the first such incident in its 25 years of operation, whereas it was one of the best-run banks only four years ago.
The observer submitted a number of reports on the situation of BASIC Bank on various occasions. The central bank has sent those reports to the Anti-Corruption Commission (ACC) for conducting further probe into the irregularities involving around Tk 4,500 crore loan scam and take punitive action against the culprits.
According to the report, Bacchu and sacked managing director of the bank Kazi Faqurul Islam had attempted to carry on their murky financial activities even in the presence of observer Ashok Kumar Dey, a general manager of the central bank.
Their greed reached such a level that the duo not only forced the bank to dole out loans to borrowers with fake documents, but included false agenda in the minutes of board meetings as well.
For example, following the insistence of the observer, the board decided to seek an explanation from the then MD as to why 106 proposals involving Tk 1,354 crore loan were included in the minutes without any discussion at the 327th board meeting in December last year.
It was decided that the issue would top the agenda of the 329th meeting held in April this year and will be placed at the 330th meeting the same month for approval.
But the minutes skipped the agenda, prompting the observer to intervene and ask the board to look into the issue.
The board then included a false and distorted agenda without explaining what it was asked to do.
Under the headline of "Confirmation of the minutes of the 328th meeting of the Board of Directors," the first agenda reads: "While the item came up for discussion, the Observer recalling the minutes of the 327th meeting of the Board of Directors of the Bank wanted to know the reason for inclusion of additional 106 proposals in the said minutes without holding any discussion on the same in the meeting. In reply, it was informed that with the consent of the Chair, proposals pending for rescheduling/regularisation and some other important issues were incorporated in the minutes to save the Bank from the burden of further classification."
This incident in particular hints at the former chairman's active role behind the embezzlement of Tk 4,500 crore of the state bank.
Instead of explaining the irregularities, the former MD resorted to another count of deception by incorporating distorted and false statement in the minutes of the 329th board meeting, the observer stated.
"The MD attempted to change the decision of the board meeting tactfully," said the report.
Through the 106 proposals, loans with serious irregularities were rescheduled and renewed and even their grace period was extended.
"This kind of activity is a gross violation of banking norms and rules, and amounts to deception and fraud," says the observer's report.
The BB investigations identified massive financial anomalies involving the said amount of loans in Dilkusha, Gulshan and Shantinagar branches of BASIC Bank between 2009 and 2013. Later in May this year, the central bank suspended all loan proceedings in these branches.
Earlier, the government dissolved the seven-member board of the trouble-ridden bank over its role in the irregularities.
Bacchu stepped down from the post of chairman earlier this month while the central bank removed MD Faqurul Islam on May 25.
The BB report sent to the ACC said many borrowers withdrew money from the bank through pay orders and in cash using names of companies that do not even exist.
RK Food Ltd, for instance, took out Tk 59.85 crore from the bank, MRL Oil and Poultry Industries Tk 59.47 crore, Well Tex Ltd Tk 44 crore, S Resource Shipping Lines Tk 30.50 crore, Shifan Shipping Lines Tk 37.45 crore, Asian Shipping Lines Tk 23 crore, Anam Socks Ltd Tk 12.31 crore, Adib Dyeing Mills Ltd Tk 28 crore, Gazi Auto Bricks Tk 24 crore and Belayet Navigation Tk 24 crore.
The clients named in the BB report also include SBI Trading having borrowed Tk 15 crore, Dove Enterprise Tk 16.72 crore, Ruddraw Specialised Cold Storage Tk 19 crore, SM Auto Bricks Tk 13.52 crore, Novo Auto Bricks Tk 29.90 crore and Kings Trading Tk 2 crore.
Comments