Cash Incentive Scam: BB blocks rehiring of Janata's audit firm
Bangladesh Bank has rejected Janata Bank's plea for reappointing Syful Shamsul Alam & Co to audit the state-owned bank's financial health as it found that the firm allegedly helped Crescent Group embezzle government funds of Tk 408 crore in cash incentive.
Janata Bank applied to the BB in June for the auditor's reappointment, but the BB rejected the request on Tuesday, a senior official of the central bank confirmed yesterday.
The BB may also punish the audit firm for helping Crescent misappropriate taxpayers' money, the official told this newspapers, seeking anonymity.
Syful Shamsul Alam & Co may be dropped from the list of 75 chartered accountancy firms approved by the BB to carry out audit on banks and non-bank financial institutions.
According to the Bank Company Act 1991, a chartered accountancy firm will be delisted for two years if it commits any wrongdoing while carrying out audit.
A bank or non-bank financial institution has to take approval from the BB to appoint any of the 75 firms to carry out audit on its financial health.
A report of the Bangladesh Financial Intelligence Unit (BFIU) says Syful Shamsul Alam & Co issued audit certificates, mentioning that Crescent was qualified to enjoy the cash incentive though Crescent failed to repatriate the export proceeds from abroad -- a major violation of the banking rules.
As per a BB circular issued in December 2001, exporters cannot collect the incentive, meant to encourage exports, until the entire export earnings are credited by the importer to the exporter's bank.
But that didn't happen in the case of Crescent. Yet, the audit firm certified the exporter for the cash incentive.
The auditor issued faulty audit certificates in favour of the business group between 2016 and 2017, says the BFIU report.
Janata Bank appointed Syful Shamsul Alam & Co to carry out an audit on its financial operation between 2016 and 2017.
Crescent received a total of Tk 1,074 crore in cash incentive against its exports between 2013 and February this year, and a chunk of the cash was given to it though 653 of its export bills that Janata bought remain overdue.
The investigators found that Crescent showed export proceeds against 117 export bills but the proceeds came not from the issuing banks but from some third parties that have no relation with the importers' banks.
The export proceeds of these 117 bills were sent from different remittance companies in the UAE.
The investigators suspect that the money was actually sent from Bangladesh to the UAE and then brought back to show as export proceeds with the intention to avail cash incentive.
Contacted, Md Syful Islam, managing partner of Syful Shamsul Alam & Co, said his firm had carried out the audit based on the documents provided by Janata Bank.
“The bank misled our firm by providing false information about Crescent Group,” he claimed.