Nagad to go through forensic audit
The administrator of Nagad, a company that provides digital financial services under the Bangladesh Post Office, decided to conduct a forensic audit of all its previous work alongside a regular audit for fiscal year 2023-24.
A forensic audit is an examination and evaluation of a firm's or individual's financial records, through which evidence is derived to be used in a court of law or legal proceeding.
On August 21, the Bangladesh Bank (BB) appointed Muhammad Badiuzzaman Didar, who served as director of the central bank's Chattogram office, as administrator of the mobile financial service (MFS) provider for a one-year term, as per an internal central bank order.
To support the administrator's overall operations, six central bank officers were also appointed to different positions at Nagad.
This decision was made in the face of numerous allegations of irregularities in the MFS provider's operations and dealings.
In a letter recently sent from the Nagad administrator's office to the director general of the Directorate of Posts, the importance of forensic audits in assessing the quality of all previous works was highlighted.
Nagad's previous management team, including managing director and CEO Tanvir A Mishuk, was effectively dissolved following the administrator's appointment.
Nagad, which entered the market in March 2019, is still running on a temporary licence from the BB.
In June, the central bank extended the tenure of its temporary licence for the seventh time, meaning it is set to expire in June next year.
In another move, Didar lodged a general diary (GD) against Mishuk at Banani Police Station on September 5, citing safety concerns.
According to the complaint, Didar said he felt threatened after Mishuk sent him an intimidating text message on September 4.
The Daily Star has obtained a copy of the complaint, signed by Shahin Alam, duty officer of the Banani Police Station.
Bangladesh Bank spokesman Mezbaul Haque said Didar's GD was filed following a text conversation with Mishuk.
He said the administrator was threatened after the previous management of Nagad filed a writ petition with the high court against Bangladesh Bank, which seeks to challenge the appointment of the administrator.
The former Nagad CEO could not be reached for comment as his mobile phone was switched off.
In recent times, numerous allegations have been raised against the MFS provider.
For instance, Nagad still has loans amounting to Tk 36 crore with Exim Bank, which was taken against its digital currency in clear contradiction with central bank guidelines.
There are also allegations that the MFS provider generated digital currency despite having a deficit balance in its trust cum settlement account that is maintained with several banks.
The MFS provider also got preferential treatment from various ministries during the Awami League regime, which helped boost its customer base.
For example, the government's stipend for secondary and higher secondary students was initially distributed through payment methods such as bKash, Nagad, Rocket and various banks chosen by the beneficiaries.
However, in January of 2024, without following any tender or competitive process, the Secondary and Higher Education Division of the education ministry issued a directive granting Nagad exclusive rights to disburse the stipends.
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