Bangladesh Financial Intelligence Unit (BFIU) yesterday issued an order to freeze the accounts of nine former directors and two officials of troubled Peoples Leasing and Financial Services (PLFS) over their alleged involvement in driving the non-bank financial institution into the ground.
The BFIU instructed all banks, non-bank financial institutions, insurers and cooperative societies to follow the order.
The intelligence unit also embargoed a transfer of their moveable and immovable assets.
The intelligence unit has taken the move in line with an order given by the High Court on Sunday to start the liquidation process of the scam-hit PLFS.
As part of the liquidation process, the central bank, on behalf of the government, will take over ownership of the PLFS within a day or two.
The central bank is now forming a team led by Deputy General Manager MD Asaduzzaman Khan, who was appointed as liquidator by the High Court on Sunday, to take over the PLFS, said a Bangladesh Bank official involved with the process.
Banks, NBFIs, insurance companies, brokerage houses, merchant banks, Central Depository Bangladesh and co-operative societies will have to take required measures against the 11 persons within seven working days, according to the BFIU letter served to them.
The nine former PLFS directors are: Moazzem Hossain, Nargis Alamin, Humayra Alamin, Arefin Shamsul Alamin, Mohammad Yousuf Ismail, Md Motiur Rahman, Bishwajit Kumar Roy, Md Shahidul Haque and Khabiruddin Miah.
The alleged officials are Kabir Mostaque Ahmed and Nipendra Chandra Pandit.
All 11 individuals were with the PLFS until 2015.
The financial organisations concerned will have to submit detailed information of the liquid and illiquid assets of the 11 persons to the BFIU.
Punitive measures against the individuals and the liquidation process are running in tandem, the central bank official said.
“The central bank team has already completed all preliminary works to take over the PLFSL in the interest of its depositors. It is just a matter of time.”
The management of the NBFI will have to submit detailed information of its assets and liabilities to the liquidator within 21 days from the date of his appointment by the High Court.
The liquidator will have to submit a report on the PLFS’s assets and liabilities to the High Court within four months after verifying the financial condition of the NBFI.
The High Court will then give instruction on how to pay back the depositors’ money.
“But, we do not know how much time will be needed to complete the liquidation process as this is the first incident in the country’s financial sector,” he said.
As of December last year, the NBFI disbursed Tk 1,131 crore in loans and mobilised deposits worth Tk 2,036 crore.
More than 60 percent of the disbursed loans has become defaulted.
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. In 2015, the central bank had removed four of the nine directors for their involvement in the scandal.