Uncertainty continues to loom over the fate of 185 employees of People’s Leasing and Financial Services (PLFS) as its liquidation process began last week with the appointment of a Bangladesh Bank official as liquidator.
In global practice, the start of the liquidation process ushers in dismissal of staff. Of the employees of PLFS, 100 are permanent and the rest on contractual basis.
“We are in grave concern about our career. It will be very tough to get a job in another institution as our company is being closed down for insolvency,” said a senior official wishing anonymity.
He joined in 2015 leaving a leading private commercial bank. There are a couple of others like him who took the gamble to go onboard in 2014-15 after the PLFS got restructured with a new board and management.
The Daily Star talked to another mid-level employee who had also left a top non-bank financial institution (NBFI) but now repenting the move.
A central bank official involved with the liquidation process said there would definitely be job cuts. He did not clarify further.
“There is no need of so many staff to get the liquidation process done. Holding onto staff longer means spending extra money from a company that has become insolvent,” said another official.
Depositors and creditors will be unable to get the whole of their money back if the company continues spending big chunks in salaries, he said.
A handful of staff will be needed to recover loans and provide depositors’ funds, he said, adding that the liquidator would also need help from the staff to successfully complete the task.
Earlier on June 27, the finance ministry instructed the central bank to shutter the NBFI for its failure to improve its conditions, in a first for Bangladesh’s financial sector.
As part of the process, the High Court gave the go-ahead to the central bank to appoint a liquidator last week.
The High Court also ordered to freeze the bank accounts of nine former directors and two top officials over their alleged involvement in driving the NBFI into the ground.
They have also been barred from transferring their moveable and immovable assets as well.
The NBFI’s problems came to the surface in 2013-14, when some of its directors made off with Tk 570 crore by way of submitting fake documents, according to a central bank inspection report.
Later, the central bank removed four directors from its board in 2015 and a group of new faces joined.