Banks caught in Bismillah Group scam are yet to retrieve any fund | The Daily Star
12:00 AM, October 15, 2015 / LAST MODIFIED: 01:01 AM, October 15, 2015

Banks caught in Bismillah Group scam are yet to retrieve any fund

The five local banks that lent Tk 1,100 crore to the fraudulent Bismillah Towels Group are yet to recover a single penny three and a half years after the scam was detected.

Bismillah Group, which used to make terry towels for the export market, allegedly embezzled the amount with the help of bank officials between June 2011 and July 2012.

The banks -- Jamuna, Janata, Prime, Premier and Shahjalal Islami -- have invested both human and capital resources to retrieve the loans, but their efforts were thwarted by the mastermind behind the scam: Bismillah Group's Managing Director Khwaja Solaiman Anwar Chowdhury.

For instance, the five banks intended to sell the properties Bismillah Group had mortgaged with them for the loans.

They had even won a court order in their favour but Bismillah delayed the mutation of the properties by filing a writ petition with the High Court, said Shafiqul Alam, managing director of Jamuna Bank. Bismillah Group owes Jamuna around Tk 180 crore.

Jamuna filed a case nearly two years ago to recover the money by selling off the property -- worth Tk 100 crore -- that Bismillah attached with the loan.

State-owned Janata Bank is the biggest casualty of Bismallah's duplicitous ways, with its loans to the group amounting to about Tk 400 crore.

The bank claims that they have full security coverage against the loan. Yet, it haunts the bank the most.

“Bismillah's loan has become the bank's biggest headache,” said Omar Farooque, deputy managing director of Janata Bank.

A case was filed six months ago to recover the amount but it is still awaiting a verdict, he said. Prime Bank's exposure to the scam is Tk 300 crore, Shahjalal Tk 150 crore and Premier Tk 63 crore.

Like the other victim banks, Prime also filed a case to recover the loan by selling Bismillah's assets attached to it. But Bismillah challenged the move, saying the lender cannot file the case.

“Recently, we have been cleared by the court that we can take legal actions against borrowers,” said Ahmed Kamal Khan Chowdhury, managing director of Prime Bank.

Of the five banks, only Prime has made full provisioning against the loans as per the regulatory requirement set by the central bank. The other banks are provisioning the loans gradually.

After an investigation into the loan scam, the Anti-Corruption Commission (ACC) in 2013 filed 12 cases against 53 people, including 13 officials of Bismillah Group and 40 bankers, on charges of swindling over Tk 1,100 crore from five commercial banks.

Last month, the ACC approved a chargesheet in a case against 14 people, including the managing director and chairman of Bismillah Towels, for their alleged involvement in the embezzlement.

But no-one is yet to be arrested, a senior ACC official told The Daily Star yesterday.

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