Reconstruct People’s Leasing to return money

The swindled depositors of People's Leasing and Financial Services (PLFS) yesterday demanded the central bank move to return their money by reconstructing the company.

The Individual and Small Depositors' Council of the non-bank financial institution, a platform that has been agitating for more than a year to recover their funds from PLFS, brought out a human chain in the capital's Motijheel.

The forum later submitted a memorandum to the central bank governor as well.

As much as 6,000 depositors of PLFS are now in a dire strait because of the ongoing liquidation process of the NBFI, the platform said at a press conference after the human chain.

"The depositors repeatedly communicated with the central bank but failed to get back the money," said Mohammad Atiqur Rahman Atiq, chief coordinator of the platform.

Although some senior officials of the central bank have been monitoring PLFS since 2015, some plunderers siphoned off a huge amount money from the NBFI, he said. The central bank did not take any punitive measure against the scamsters, Atiq added.

Individuals and businesses deposited Tk 2,036.22 crore at the NBFI. Of the deposits, a large amount had been plundered, according to a central bank report.

Prashanta Kumar Halder, a former managing director of Reliance Finance and NRB Global Bank, swindled more than Tk 3,500 crore from four NBFIs, including PLFS. Some former directors of the NBFI were also involved.

Against the backdrop, the central bank applied to the High Court to liquidate the NBFI. The court accepted the central bank's plea and appointed a liquidator.

Liquidation of PLFS means closing its operations permanently and Bangladesh Bank, with the court's permission, will take actions to settle liabilities by selling off its assets.

Some business groups have recently requested the finance ministry to allow them to reconstruct PLFS. The ministry has sought legal opinions from the central bank to this end.

Bangladesh Bank Governor Fazle Kabir told the depositors that the central bank had already suggested the finance ministry reconstruct the company, said Samia Binte Mahbub, joint convener of the platform.

"We will give a one-month ultimatum to take initiatives to return the depositors' money. If steps are not taken, we will go for a tough movement," Samia said.

The problems of PLFS began in 2013-14, when some of its directors made off with more than Tk 1,000 crore by way of submitting fake documents, according to a central bank inspection report.

In 2015, the central bank removed five directors for their involvement in the financial scandal. But it was not enough. Since then the NBFI has been on a downward spiral.

As of May 31 last year, retail investors held 68 per cent of the NBFI's stock listed on the Dhaka Stock Exchange and they stand to lose about Tk 193.52 crore -- and institutional investors Tk 25.75 crore -- if the liquidation goes through.

Some 15 banks and NBFIs have Tk 850 crore stuck in PLFS. The trading of the stock has been suspended since July last year.

In the event of liquidation, external creditors are paid off first and then the depositors, debenture holders and preferential shareholders in that sequence.