By using shell companies and moving money from one account to another, Prashanta Kumar Halder laundered at least Tk 3,500 crore out of the country and is now enjoying his life in Canada. In his tracks, PK Halder left four non-banking financial institutions (NBFI) in ruin, and in case you were wondering why he chose four NBFIs instead of banks, the answer could be because many of our banks' vaults may very well be empty already.
After all, as this newspaper reported on August 16, financial regulators and government organisations are still struggling to recover Tk 18,253 crore that were embezzled in five of the more spectacular financial scams involving the country's banks. Even that aside, the financial sector is reeling from huge defaulted loans.
As the report also mentioned, the prime suspects in some of those cases were not even the main accused in the lawsuits due to them being connected with influential quarters. So can you really blame PK Halder? If all those crooks got their share, I bet Halder must have thought, "why not me"? "I'm a crook too." This is what happens when you sit idly by while delinquents rob the public exchequer.
On January 8 this year, the Anti-Corruption Commission filed a case against Halder for amassing property worth around Tk 274.91 crore from unknown sources. Upon digging deeper—a bit too little too late, mind you—the Anti-Corruption Commission unearthed that Halder's shell companies had borrowed massive sums of money from the NBFIs without collateral, "perhaps" because he owned shares in those NBFIs.
This, too, is an old story. It was similar corruption that had previously led to another NBFI—First Finance—being unable to maintain its mandatory cash reserve with the central bank. As well as the corruption that nearly sank the Farmers Bank ("Banking Sector: A house of cards", The Daily Star, December 27, 2017). Yet, our banks, NBFIs, and the regulators seem not to have learned any lessons, which gives the impression that either they are extremely slow learners (very unlikely) or simply don't want to learn (more likely).
Nevertheless, one mustn't take any credit away from Halder for being a dedicated and expert criminal. He took years to amass his wealth through one fraud after another. He bided his time, and took the opportunity of having people like one of his cousins, and a former college being in key positions of the institutions he robbed, to rob them.
Halder could not have committed the crimes all on his own, neither could he have perpetrated them with just one or two accomplices. Clearly others were involved in them—we are talking about Tk 274.91 crore after all. In this connection, the ACC has summoned multiple people for questioning. Let's hope that this time they catch the perpetrators before they launder all the money and themselves, out of the country.
Undoubtedly there is something wrong in our system which is letting such huge amounts of money to be siphoned out of the country. For example, it was the ACC's blunder which allowed Motazzaroul Islam Mithu, who has several medical equipment supplying companies including Lexicon Merchandize and Meditech Imaging Ltd, to take over control of tenders in the health sector. In 2013, serious anomalies in the health sector led the ACC to ask Mithu to submit a wealth statement following the allegation that he had amassed wealth of about Tk 50 crore beyond the known source of income. But he did not bother to respond to the notice.
Later on, his syndicate looted about Tk 450 crore without supplying any medical equipment to the Shaheed Suhrawardy Medical College and Hospital, according to a letter issued to the public administration ministry on May 30. According to a US-based real estate information providing online service, in 2014 Mithu bought a villa in New York spending Tk 6.6 crore (USD 847,500). Had the ACC been more proactive, it is possible that Mithu could have been exposed long ago. However, given the ACC's lethargy, Mithu managed to continue amassing wealth and in 2016, his name surfaced in the Panama and Paradise Papers leaks—and it is quite likely that he has laundered huge sums of money out of the country.
A Global Financial Integrity report ranks Bangladesh as one of the top countries facing trade-based money laundering (TBML), which is a significant threat to growth and sustainable development. It estimates that some USD 3.1 billion, or Tk 26,400 crore, is being illegally remitted from Bangladesh a year. To address this, the government is expected to tighten tax rules soon—and taxpayers who inflate values of goods when declaring investments in their tax returns will have to face a hefty fine. But will that be enough? What about those who are defrauding banks and NBFIs—and particularly those with "political connections"—and laundering the money they have hollowed out of them?
The problem is not only a shortage of regulation, but a lack of their proper application, equally for all. As Tacitus, the famous Roman historian and politician said, "the more corrupt the state, the more numerous the laws". And Bangladesh seems to have become a prime example of what he was referring to.
As long as the authorities turn a blind eye to "some" because of their "political connection", many more who are perhaps not as well connected—and therefore have to flee to some foreign country after robbing banks, NBFIs or other institutions, instead of taking over banks or public offices in the country—will continue to follow in their footsteps. In the meanwhile, huge sums of taxpayers' money will continue to get drained from the economy, causing enormous damage to Bangladesh.
Moreover, it is not only the perpetrators of these crimes that must be held accountable, but the regulators who "fail to notice them on time" and either stop them or apprehend the criminals, who must also be punished. Along with those "connected" individuals who try to influence the regulators—as it is mainly this practice that has made our regulatory bodies toothless.
Eresh Omar Jamal is a member of the editorial team at The Daily Star.
His Twitter handle is: @EreshOmarJamal