The government has decided to pay back a total of $ 7.632 million to the Saudi Bangladesh Industrial and Agricultural Investment Company Limited (Sabinco) to avoid any image crisis.

The amount has been trapped with Eastern Bank Limited (EBL), sources said.

Banking division of finance ministry has also decided that the said amount will be paid back to Sabinco after withdrawal of a court case. Authority of EBL gave its consent to pay back the money to Sabinco, although it has not withdrawn the case yet.

Sources in banking division said a repatriate meeting on September 29 at finance ministry decided that the EBL will pay back that money after withdrawal of case.

Besides the officials of the banking division, the representatives of the Bangladesh Bank, EBL, Sabinco attended the meeting. Banking secretary Shafiqur Rahman Patwari presided over the meeting.

Earlier, Finance Minister AMA Muhith asked the banking division and the Economic Relations Division (ERD) to take necessary steps, so that the fund could immediately be sent, the sources added.

"I have pledged to the Kingdom of Saudi Arabia (KSA) to pay back the Sabinco's money that was mismanaged in the presently-defunct Bank of Credit and Commerce International Ltd (BCCI)," the minister wrote in a directive to the secretaries concerned.

"The money has to be returned," Muhith noted, urging them to take necessary actions in this regard within one month.

The minister visited the KSA on first week of July this year and met several high-ups of the Saudi government, where the issues of sending back Sabinco's money was discussed. The KSA supplied the money as equity capital of the company.

EBL managing director and CEO, Ali Reza Iftekhar told daily sun that Sabinco has not yet withdrawn the case. “We will send back the fund after Sabinco withdraws the case,” he added.

He also said that EBL authority would discus the issue with the finance ministry and Bangladesh Bank and take decision about the matter. “Since the case is still in the court, we can not speak more about the issue,” he added.

The Sabinco is a development financial institution and investment company that was established through joint initiatives of the governments of the KSA and Bangladesh under a protocol signed in 1984.

The company aims at creating assets, developing entrepreneurship and generating employment through promotion of productive enterprises.

It focuses on investment in manufacturing and agro-processing industries, infrastructure projects and utility services in Bangladesh on commercial basis through loans, finances and equity participation.

BB Governor Dr Atiur Rahman at the beginning of the year informed the finance ministry that paying back the funds is very much essential to maintain good relations between the two countries.

BB is also concerned of recovering the fund that was deposited in the BCCI, he added.

The BCCI, closed in July 1991, was later turned into EBL and all the deposits and debts of BCCI were transferred to EBL.

Although the Sabinco’s fund got stuck due to legal complications, the central bank took the initiatives to bring back money.

Source: The Daily Sun/ Bangladesh/ 2nd Dec 2011