How Nasrul Hamid cut $300m LPG project primary deal for his $100 shell firm

It is a story of how former state minister for power Nasrul Hamid had set up a shell company in Singapore in the name of his uncle and, ignoring all concerns about conflict of interest, had chosen his company along with two international companies – Swiss trading firm Vitol and Marubeni Corporation of Japan – to get a $305 million LPG terminal deal.

In March 2021, the Bangladesh Petroleum Corporation (BPC) signed a memorandum of understanding (MoU) with a consortium of three companies – Vitol, Marubeni Corporation and Bangladeshi company PowerCo registered in Singapore.

PowerCo is basically a shell company with a paid-up capital of only $100 with a direct link to the-then state minister for power Nasrul Hamid. The other partners – Vitol and Marubeni – are also internationally controversial and both companies have been penalised by the US Justice Department at different times for bribing officials in various countries to secure contracts.

As per the MoU, the three companies will build a million-tonne capacity LPG terminal for $305 million on the Build, Own, Operate and Transfer (BOOT) model.

Accordingly, in 2022-23, the government spent Tk6 crore to hire a project consultant. In the running fiscal year, Tk25 crore has been allotted to conduct its feasibility study. However, till date the BPC neither did appoint the consultant nor could float the feasibility study.

A month before the BPC signed the agreement, in February 2021, The Business Standard ran a story on this upcoming deal headlined "$100 co, disputed Vitol chosen for largest LPG terminal".

While the story did not directly name Nasrul Hamid, he immediately mounted immense pressure on TBS to unpublish the story from its website and harassed the reporter concerned dubbing him as a "Shibir man".

Excerpts from 22 February 2021 TBS report

The report said, "The Bangladesh Petroleum Corporation (BPC) has decided to award the contract for building the country's biggest-ever deep-sea liquefied petroleum gas (LPG) terminal to a consortium of three companies, two of which have questionable backgrounds.

"Swiss trading firm Vitol, a partner in the consortium that is getting the contract to build the million-tonne capacity LPG terminal in Maheshkhali, was penalised $164 million last December [2020] by regulators in the United States and Brazil for paying Brazilian officials bribes to boost its business.

"PowerCo International, the Bangladeshi shareholder of the consortium, is listed with the Accounting and Corporate Regulatory Authority (ACRA) of Singapore with a paid-up capital of only $100.

"The Marubeni Corporation of Japan is the other company in the consortium."

The Vitol-Marubeni-PowerCo consortium will build the Maheshkhali LPG terminal at a cost of $305 million and will give the BPC 30% share for providing 47 acres of land for the project.

Vitol's controversy aside, the concerning part of this story was the Bangladeshi company PowerCo. PowerCo was incorporated on 10 August 2017 with Md Kamruzzaman Chowdhury and Nabil Khan as its shareholders – Kamruzzaman being Nasrul Hamid's close relative while Nabil being a friend.

How Nasrul is linked with PowerCo

The TBS report stated: In its portfolio, PowerCo introduced itself as a leading Project Development & Trading company in the Power, Energy & Infrastructure Sectors based in Dhaka with offices in Singapore.

In its listing with the ACRA, the national regulator of business entities, public accountants and corporate service providers in Singapore, the company stated that its principal activities are management consultancy services and wholesale trade in a variety of goods.

In the ACRA, PowerCo showed that its paid-up capital is only $100.

As per the project proposal, of $305 million's project, Vitol and PowerCo International wished to hold 30% shares which means each of them will have to bear $45.75 million.

Industry insiders said a company cannot hold shares of a consortium without bearing the cost. They also questioned how a company can bear $45.75 million if its paid-up capital is only $100.

This correspondent paid a visit to the PowerCo's head office in the capital's Banani and saw only three employees present, including a receptionist.

When asked about its top management, they could not name the company's managing director or the chief executive officer. They just provided the contact of one M Murad Hassan, the company's chief operating officer.

Hassan told The Business Standard that he did not know about BPC's decision.

When asked about the company's share and investment in the consortium, he sought more time to comment. He also failed to name the company's managing director.

At that time, TBS could not publish some information.

Further investigation showed that besides PowerCo, Murad Hassan was also the chief executive officer of Delco Business Associate Ltd, a sister concern of Hamid Group.

As per the documents, once Nasrul Hamid was the managing director of Delco Business Associate, later his younger brother and his son were placed at top positions of the company.

Finding PowerCo's link with Hamid Group and Nasrul Hamid, TBS dug deeper and found that Kamruzzaman Chowdhury was an uncle of Nasrul. He was just a frontman while Nasrul Hamid was controlling the company.

After TBS ran the report and then was pressured to take it off its site, Netra News did a further investigation. In a recorded conversation with Netra News, Nasrul Hamid's uncle Kamruzzaman said he does not know much about the company which he owns on paper – he just signed company registration documents, as requested by his nephews.

"They are my relatives. I am their maternal uncle. They asked me to sign [the documents], I signed. I didn't even read closely what [I was signing]," Netra News quoted him as saying.

Kamruzzaman claimed he is no longer a shareholder of PowerCo.

"I don't know the details. In fact, I don't know anything. I was told, 'You have some shares in this company, sign here', I signed. Then, [after some time], they told me, 'You no longer have shares, sign here', I signed. That's it. I don't know anything beyond that," he added.

PowerCo is further connected to Nasrul Hamid through Murad Hassan, who is listed as its alternative director in the Singaporean filing. Hassan is also the CEO of Delco Business Associate.

The managing director of PowerCo is Nabil Khan, an Indian national who runs the Dubai-based investment company Ascentis Capital. Khan and Enthekhabul Hamid, Nasrul Hamid's younger brother, were "friends" on Facebook.

Khan is also the managing director of the Middle Eastern branch of Seatrek Shipping Company based in Singapore, which is an associated company of a Chattogram-based shipping line.