Monirul Alam

The management of state-run Sonali Bank did not act on a warning from Bangladesh Bank (BB) in mid-2010 regarding abnormal ceiling of loan disbursement to Hallmark Group, BB sources said.

During an inspection in June-July period of 2010, a BB team found that the Ruposhi Bangla branch of Sonali Bank had been preparing to provide a loan of Tk 3.5 billion to Hallmark Group against LC bills for import of raw materials for one of its readymade garment unit.

“The branch officials couldn’t justify the loan. Immediately after the matter was detected, we issued an early warning. But, neither the bank board nor its management reported us anything about the matter,” said a member of inspection team, seeking anonymity.

While Commenting on the issue, a BB high official said the central bank has always been alert against abnormal credit growth in different branches of schedule banks and finally detected the single-highest loan-forgery at Sonali Bank and found the bank’s board accountable during a regular inspection in last May.

“But, by this time, huge amount of loans have already been disbursed to the firm (Hallmark group). Most of the loans were disbursed between December 2011 to March 2012,” said the official.

A total of Tk 35.47 billion has been lent illegally to little-known Hallmark Group through different branches of Sonali Bank, the BB inspection found, which was confirmed later in a functional audit by an independent audit firm.

As per the rules of business and BB guidelines, any big loan must be approved by the board of directors of the respective bank. Thus, the Sonali Bank’s board cannot deny the responsibility of disbursing such a huge amount of loan to Hallmark Group, said the sources.

After the loan-forgery prompted a wave of criticism on Sonali Bank top brass, some of the members of the bank’s board of directors claimed that the issues were not brought to the notice of the incumbent board by the previous managing director.

“Such a loan-forgery could have been checked if the previous managing director (Humayun Kabir) would brought the issue to the notice of the board,” the board’s audit committee chairman KM Zaman told reporters at a press conference last Thursday.

Km Zaman denied his responsibility when reporters asked him why the accounts of Rupashi Bangla branch of his bank was not audited.

According to banking rules, every branch must be audited twice every year.

News: Daily Sun/Bangladesh/03-Sep-12

The Anti-Corruption Commission will quiz Syed Modasser Ali, health adviser to Prime Minister Sheikh Hasina, as part of its ongoing investigation into the Hall-Mark loan scam.

ACC Commissioner Md Badiuzzaman, acting chairman of the anti-graft body, yesterday officially informed journalists that the adviser's name had come up during their probe into the Tk 3,547 crore scandal.

He said the commission had to question the adviser to examine the information it had.

Citing sources, The Daily Star on Thursday reported the ACC had information that Modasser had influenced Sonali Bank into illegally granting a huge amount of loan to Hall-Mark Group.

"As his [Modasser's] name has surfaced, of course we have to quiz him," the ACC commissioner said, adding that any other bigwig would be interrogated if necessary.

Meanwhile, Tanvir Mahmud, managing director of Hall-Mark, yesterday claimed to the ACC investigators that his company had taken the loan from Sonali Bank “legally”.

After being interrogated by the ACC team, Tanvir told journalists that he had assets worth 20 times higher than the amount borrowed from the state-run commercial bank.

"I am not involved in any corruption. I have taken money [from Sonali Bank] and I will return it," he said. "I did not flee the country; I will not do so. I will return the money and only then will I go."

He also claimed he had not taken any help from any minister or lawmaker to get this loan.

Tanvir said the health adviser attended only two events of his company and went to his hometown for a reception programme. If it was a crime, the government should make it clear, he added.

Earlier, a Bangladesh Bank probe found that the Ruposhi Bangla Hotel branch of Sonali Bank had lent Hall-Mark Group and five other companies Tk 3,547 crore between 2010 and May this year on forged documents.

Of the Tk 3,547 crore, Hall-Mark Group alone took Tk 2,686.14 crore while T and Brothers Tk 609.69 crore, Paragon Group Tk 146.60 crore, Nakshi Knit Tk 66.36 crore, DN Sports Tk 33.25 crore and Khanjahan Ali Tk 4.96 crore.

An investigation team yesterday quizzed Hall-Mark Chairman Jesmin Islam and Tanvir from 2:00pm to 5:00pm.

Hall-Mark General Manager Tusher Ahmed also went to the ACC office but the investigators could not interrogate him due to time constraints.

Contacted, Tusher said Jesmin and Tanvir were asked how they had got the money and what had been done with it.

“The ACC is investigating all 34 garment units of the group,” he told The Daily Star over the phone.

The ACC did not demand any document from the group on the first day of the quizzing, he said. “If necessary, the ACC might call us in the near future.”

The six-member probe body has so far interrogated 17 Sonali Bank officials.

Led by ACC Deputy Director Mir Md Zainul Abedin Shebly, the team yesterday also quizzed top officials of DN Sports, another business organisation.

The five other investigators of the team are Akhter Hamid, a deputy director; assistant directors Nazmus Sadat and Moshiur Rahman and deputy assistant directors Mohammad Mojibur Rahman and Zainal Abedin.

DN Sports Chairman Motahar Uddin Chowdhury, Managing Director Shafiqur Rahman and Director Fahmida Akhter Chowdhury Shikha were questioned from 10:00am to 2:00pm.

The ACC sources said all the officials from Hall-Mark and DN Sports claimed they had taken loans from Sonali Bank by following due process.

News: The Daily Star/Bangladesh/03-Sep-12

The 96th branch of Al-Arafah Islami Bank Ltd was inaugurated at Central Road, Payra Chattar in Rangpur Sunday.

Ekramul Hoque, Managing Director of the Bank inaugurated the branch as chief guest, says press release.

Md. Mosaddeque Hossain Bablu, President of the Rangpur Chamber of Commerce & Industries, Mostofa Kamal, proprietor of North Bengal Trading, prominent businessmen Abbas Ali Sarkar, Major (Retd) Md Nasim Uddin and Shah Md Nur Hossain addressed the function.

Engr. Md. Habib Ullah, senior vice president delivered welcome speech.

Abed Ahmed Khan, senior vice president and Jalal Ahmed, assistant vice president also attended the ceremony.

A large number of local businessmen, clients and well-wishers were present on the occasion. Manager of the branch Md. Mogreb Ali thanked the audience.

News: Daily Sun/Bangladesh/03-Sep-12

Social Islami Bank Limited (SIBL) recently shifted its Khatunganj branch at new premises aimed at providing best and modern banking services to its customers.

Al-haj Nasiruddin, Chairman of the board of directors of the bank, inaugurated the newly-shifted branch as the chief guest, said a press release.

Kamaluddin Ahmed, and Md Shah Alam, former chairmen, Mohammad Azam and Md Fazle Morshed, directors of the bank attended the function.

News: Daily Sun/Bangladesh/03-Sep-12

Sonali Bank board has not taken any responsibility of Tk 36 billion loan scam of the bank.

"We don't feel that we failed to do our duties," said the bank's Director K M Zaman Romel at a press briefing after a board meeting in Motijheel on Wednesday.

"Board is very serious, judicious and competent," he claimed.

The press briefing, attended by another Director, Kashem Humayun, and Chief Executive Officer Pradip Kumar Datta, was held in the backdrop of massive corruption unearthed by the central bank. Hallmark Group is alleged to be the beneficiary of Tk 27 billion out of the total amount.

Bangladesh Bank in May found out that some corrupt officials of the bank's Ruposhi Bangla Hotel branch misappropriated Tk 36 billion through irregularities between 2011 and May 2012.
The financial regulator also sent a report to the Ministry of Finance on Monday asking for restructuring the board on the ground that it was hardly credible that the directors were not aware of the massive corruption.

When asked about the Bangladesh report, Romel said the board was yet to get it formally.

"We will submit a report about what the board so far did and what it will do in future to the Finance Minister," he added.

Romel, also the Chairman of the audit committee of the board, said the bank was taking actions against very senior officials including a former Managing Director, two Deputy Managing Directors, five General Managers and six Deputy General Managers.

"This proves that we are serious," he said, "Had the board been inactive, you (journalists) would not get so much information about the wrongdoings."

He further said the scam happened through day-to-day operations and the board cannot interfere in the regular operations.

When asked being the chairman of the audit committee why he did not take any action against the corrupt officials, he said, "No board can take any steps on its own."

Under the rules, any branch is supposed to be audited twice in a year but the Ruposhi Bangla Hotel branch did not follow it.

"Audit is the responsibility of the management and if they produced any report, the board could have taken action according to the report."

HALLMARK GROUP

Chief executive Pradip Kumar Datta said they were in constant contact with Hallmark Group, which illegally took Tk 26.68 billion in loan from the bank.

"Our main objective is to recover the money and punish the wrongdoers," he said.

"We can lodge criminal case anytime if we want to but it will not help us to recover the money before the loan is securitised," he said.

The Group acknowledged that they had taken the loan and mortgaged 46.5 acres of land, which they claimed was worth Tk 20 billion and was in process to mortgage another 1300 acres of land, he said

"We also asked them to pay 25 percent of the total loan immediately and provide security for the rest 75 percent," Datta said adding, "So far, we have collected Tk 3.77 billion from them."

"If we filed criminal case against the group, the whole amount would have been classified and we could not recover the amount," he explained.

32 OFFICIALS

The audit report found out that 32 bank officials were involved in wrongdoing and Bangladesh Bank asked the largest commercial bank to suspend them.

Director Kashem Humayun said the bank had already suspended three officials and was acting against 29 others. "There are certain procedures to take action against officials," he said.

Once charges against them are formed, they would be given seven or eight days to respond and if the replies are not satisfactory, actions would be taken.

"We will inform Bangladesh Bank about what actions have been taken so far," he said.

CEO Datta said they should not take legal steps in haste against officials so that they can get away through the loopholes of the law.

The bank in a written statement said some corrupt officials of Ruposhi Bangla Hotel branch misappropriated a huge amount of money.

Out of Tk 36.06 billion, Hallmark Group misappropriated Tk 26.68 billion, T & Brothers Group Tk 6.86 billion, Paragon Group Tk 1.45 billion, DN Sports Tk 286 million, Nakshi Knit Tk 653 million, and others Tk 153 million.

Out of the total amount, Tk 20 billion is funded and Tk 16.7 billion is non-funded. The bank has suspended payment of about Tk 10 billion of the non-funded amount.

News: bdnews24.com/Bangladesh/29-Aug-12