Financial scams: Frozen fortunes to fund victim compensation

• Money, assets recovered from alleged embezzlers, launderers to be used
• Frozen assets include money in banks, company shares

The government has decided to create a fund to compensate victims of financial irregularities by using money and assets recovered from alleged embezzlers and money launderers.

Frozen assets of accused individuals, including shares held in various banks and companies, will also be included in the fund, Bangladesh Bank Governor Ahsan H Mansur said at a press briefing at the Foreign Service Academy yesterday.

"We have already seized substantial sums stashed in various banks by individuals under investigation or facing trial. We've also taken control of shares owned by fugitives and those facing charges," he said.

The governor said the fund would be used in the public interest, with priority on the compensation to victims, chiefly depositors hurt by financial wrongdoings. It will also offer some relief to the poor, he said.

The briefing was held after a high-level meeting on anti-money laundering issues, repatriation of laundered money, and progress on the measures taken so far. Chief Adviser Prof Muhammad Yunus chaired the meeting at his residence, Jamuna.

The meeting also discussed how the seized assets could be transferred to the proposed fund and managed with transparency.

While talking about progress made by the joint team to investigate 10 business groups and ousted prime minister Sheikh Hasina's family, Mansur said new assets were still being discovered and investigated. "This is an ongoing process."

Cases have been filed based on the assets the authorities have identified so far, and those assets have been seized, he said, without disclosing the amount of the assets.

"Let me give an example, like I had mentioned Islami Bank. Shares worth around Tk 12,000 crore to Tk 15,000 crore are believed to be held there. Similarly, there are shares held in various other banks. As we identify and recover these, we see that there is a significant amount of money in our banking sector that is essentially frozen."

Chief Adviser's Press Secretary Shafiqul Alam at the press briefing said that since the interim government took charge, immovable assets of the 10 groups and Hasina's family worth Tk 1,30,758 crore domestically and $164.03 million abroad have been attached. Additionally, Tk 42,600 crore movable properties have been frozen.

Mansur said the central bank was working with foreign institutions through mutual legal assistance to recover laundered money.

He said Prof Yunus might take steps related to the recovery process during his London trip scheduled for June 9-13.

"The UK is giving us full support, and their parliamentary committee is assisting us; their experts are providing solutions.

"The Financial Times is supporting us and other newspapers are also helping by publishing various articles in our favour," Mansur said.

"If we look at the US, we are receiving support from there as well. Another country supporting us is Canada. We also have the UAE and Singapore. We have held discussions with the Singaporean government. We spoke to their resident ambassador."

The governor said if Bangladesh can prove that the money involved was indeed taken by the alleged launderers and that the money was illegal, then there is a possibility that the foreign country might cancel their citizenship. "That possibility exists, but it depends on us proving the allegation," he added.

Replying to a question, Mansur said the legal process to bring back laundered money takes around four to five years.

During this time, some intermediate or provisional measures can be taken, for example, freezing the assets that are located abroad, he said.

"This can be done within a year or even sooner, provided that we properly complete the necessary legal procedures in our country."

"After that, we need to send the request abroad through the appropriate channels. This is done through mutual legal assistance.

"We are currently engaged in this process and are in the stage of sending requests. If we receive cooperation from foreign authorities, we will be able to freeze the assets. Once the assets are frozen, formal legal proceedings will begin in court, which typically take four to five years to reach a resolution," he added.

Speaking about those accused of embezzling and laundering money, Mansur said, "I don't believe they are at peace. They are hiring top lawyers. We've heard that S Alam [Mohammed Saiful Alam] will spend $3 million a year on his legal team. That is not a sign of being at peace."

About the current turmoil involving mobile financial service provider Nagad, Mansur said Nagad's administrative team was unable to function due to the court's decision.

"We have appealed, and we hope to get justice. In the meantime, Nagad could take various actions, such as destroying documents or erasing evidence. However, to ensure that customers' money is not harmed, instructions have been given to the banks. Nagad will not be allowed to transfer any funds through the banks."

A journalist asked why the interim government had not yet taken any legal action against former central bank governors and deputy governors, who were allegedly involved in scams and loan irregularities.

Mansur said the Anti-Corruption Commission, after investigation, can take legal action if it believes that charges can be brought against them.

AFM Shahinul Islam, head of the Bangladesh Financial Intelligence Unit, was also present at the briefing.