Bangladesh’s anti-graft watchdog sues bankers, borrowers

The Anti-Corruption Commission yesterday filed 18 cases against a number of bankers and borrowers linked with the Tk 5,000-crore BASIC Bank scam between 2010 and 2013.

Of the cases, eight were lodged with Gulshan Police Station, seven with Paltan Model Police Station and three with Motijheel Police Station, accusing 56 people of embezzling over Tk 650 crore from the state lender, said police.

However, the then BASIC Bank chairman Abdul Hye Bacchu, who is believed to be at the centre of the scam, was not accused in any of the cases filed last night.

Early this year, a functional audit by the bank outright blamed the Bacchu-led board for the irregularities that cost the state-run bank more than Tk 5,000 crore.

In its inspections in 2012-13, Bangladesh Bank also found Bacchu's complicity in the embezzlement.

According to police, Kazi Faqurul Islam, who was fired from the post of BASIC Bank managing director for involvement in serious irregularities, was accused in a number of cases.

Besides, the heads of 18 companies and many bankers of the state lender were accused in the cases.

They include the bank's deputy managing directors Fazlus Sobhan, Kanak Kumar Purkayastha and A Monaem Khan, assistant general manager of its Shantinagar Branch SM Anisur Rahman Chowdhury, former manager Mohammad Ali, Gulshan Branch manager Shipar Ahmed and credit-in-charge of the same branch SM Zahid Hasan.

On September 8, the ACC gave approval to its investigating officers to file 54 cases in connection with the BASIC Bank scam. Later, it gave the nod for filing two more cases, said sources in the commission.

One of the cases, filed with Paltan Model Police Station yesterday, shows Wahidur Rahman, proprietor of Fiaz Enterprise, and Asma Khatun, proprietor of New Auto Define, embezzled Tk 78 crore from BASIC Bank's Shantinagar Branch in 2010.

In its probe, the ACC found that the then branch manager and the head of the credit committee recommended Fiaz Enterprise for loans of Tk 145 crore though the client didn't mortgage anything against the loans and had debts to other banks.

Though the credit committee from the head office detected anomalies in the loan proposal, head of the committee and deputy managing director Sheikh Manzur Morshed presented the loan proposal to the then managing director AKM Sajedur Rahman.

Sajedur ignored all negative observations about the loan proposal and presented it to the board, which approved the loan on certain conditions, said the first information report.

According to another case, also filed with Paltan Model Police Station, Ziaul Haque, proprietor of Haque Trading, opened a bank account with Shantinagar Branch in June 2012.

Three weeks later, he applied for loans of Tk 19 crore showing a plot of land as mortgage. He valued it at Tk 19.50 crore.

But a survey firm put the land price at Tk 15 crore, saying it would fetch Tk 12 crore if sold immediately. The firm submitted a report to the branch.

The credit scrutiny committee at the head office then checked the loan proposal, detected anomalies and made negative observations.

But instead of rejecting the proposal, Fazlus Sobhan, head of the committee, sent it to the then MD Faqurul for presenting it to the board. And the loan was finally approved by the board.

One of the best-run banks until 2009, BASIC Bank has been mired in financial irregularities in recent years.

Central bank inspections found 12 counts of irregularities at BASIC Bank in giving loans. These include no verification of customer's creditworthiness, absence of KYC (know your customer) procedures, and extending loans to defaulters.

The majority of the anomalies were detected in the bank's Dilkusha, Shantinagar and Gulshan branches in the capital.