Big bank scams, slow actions

Scams of the decade

Scams involving Basic Bank and Hallmark Group are among the biggest the banking sector has ever seen during the last one decade. The accumulated amount of swindled money from these two banks reached Tk9,000 crore.

While the legal wranglings seem endless, the government has been recapitalising the banks to keep them afloat. 

According to the Finance Ministry, recapitalisation in one decade would amount to around Tk19,000 crore including Tk1, 500 crore kept aside in the current fiscal year. 

Attorney General Mahbubey Alam said the Supreme Court had expressed concern several times related to scam cases of the Basic Bank.    

"Still the trials, including other scam lawsuits, are dragging on for long," he told The Business Standard.

The spokesman of Bangladesh Bank Md Sirajul Islam said that the scam cases has been discussed with the Law Ministry and the Attorney General. He said many cases could not be disposed off due to stay orders from the High Court.

Status of big scam cases

The ACC has been keeping busy for the last eight years trying to bring the guilty under the law. It filed 96 cases in four major banking scams in that time period. 

The meandering work of the corruption watchdog is evident in its failure to submit charge-sheets in five years in the BASIC Bank scam that almost emptied the state-owned bank.

Deliberate delay in investigation, overloaded courts, slow proceeding and witnesses' absence are among the reasons cited for the delay in the disposal of cases. 

BASIC Bank 

The Anti-Corruption Commission (ACC) in 2015 filed 56 cases against BASIC Bank's loan scam involving more than Tk4,500 crore. But not a single investigation has been completed during the last five years. The money was siphoned out between 2009 and 2013.

The ACC law requires investigation to be completed within180 days for a case. The deadline, however, can be extended considering the scope and complexity of investigation.

As for the BASIC Bank cases, another four years and a half have gone by after the deadline but the ACC failed to submit the charge-sheets. 

ACC's Chief Counsel Advocate Khurshid Alam said that investigations had been delayed due to the nature of the cases.  

"These are very complex cases and a large number of people have been accused," he told The Business Standard.

The ACC Chairman directed to reinvestigate the cases, Hossain added. He said the investigating officers had gotten some new documents and they had been working on those. The Director of ACC Syed Iqbal Hossain claimed the investigations were nearing an end.  

BASIC's own procedure

BASIC Bank Chairman Alauddin A Majid said the state-owned bank was following its own procedures to deal with the loan scam allegations while the ACC had not submitted the case charge-sheets yet.     

"We have already recovered around Tk1,500 crore and have rescheduled loans, while some applications are pending. Once the ACC submits charge-sheets, the cases will take up speed," he said adding that in that case, it would be easier to realise the funds.     

Courts are not happy

In May 2018, the High Court ordered to finish the investigations of all the cases within 60 days but the order went in vain. A month later, another bench of the court summoned the investigating officers for an explanation of their delay.  The investigating officials assured the court of completing the probe faster.   

Hallmark Group

Years before the BASIC Bank scam came to light, the country's banking sector saw its single-biggest scam, again involving a state-owned bank. This time it was Sonali Bank. 

On October 4, 2012, the ACC filed 11 cases with Ramna Police Station in connection with the Hallmark Group's loan scam. 

Hallmark Group Managing Director Tanvir Mahmud and 26 others were accused of misappropriating around Tk4,357crore from state-owned Sonali Bank through various means, including fraud and deception. The loan scam took place between 2010 to 2012 using allegedly cooked up documents.

The ACC submitted the charge-sheets in late 2013. Charges were framed against the accused in 2015 and 2016.    

In the case lodged over misappropriation of Tk474.35 crore, 81 out of 130 witnesses have testified so far.    

Trials of the remaining nine cases are proceeding very slowly. 

On 23 June 2016, the High Court ordered officials concerned to dispose of three cases within six months. There has been some progress on only those cases.

ACC lawyer Mahmud Hossain Jahangir said trials of two cases were almost in the last stage.  

He said a single court was holding the trials of all 11 cases causing unusual delay.

"The court is also holding trials of many other cases," he added.

Crescent Group

With BASIC Bank and Sonali Bank cases involving about Tk9,000 crore already in talks, another scam surfaced. 

Again it was a state-owned bank, Janata Bank in this case, that fell prey to a business group's deception just in one year--from January 2017 to February 2018.

In February last year, the ACC filed four cases with the Chawk Bazar police station over the Crescent Group's Tk3,443 crore loan scam from Janata bank. A big portion of embezzled money was siphoned off abroad according to case papers.         

Crescent Group Chairman MA Kader, his brother Abdul Aziz, who is the head of Jaaz Multimedia, and 13 others were accused of the cases. All of the accused are out in bail.

No charge-sheet has been submitted yet.

On February 25, Kader obtained bail in the four cases. 

Crescent Group became the talk of the town when it was named the second biggest defaulter in the Finance Minister's list submitted to the parliament recently.

Bismillah Group

On November 3, 2013, the ACC filed 12 cases against 54 people, including Bismillah Group Managing Director Khaza Solaiman Anwar Chowdhury and Chairman Nowrin Hasib, for a loan scam involving an amount of  Tk1,200 crore.      

They have also been accused of money laundering and corruption. 

Of the 54 people, 13 have been accused in all 12 cases filed with police stations in New Market, Motijheel and Ramna. 

The remaining 41 people are bank officials – 12 from Janata Bank, nine from Prime Bank, seven from Premier Bank, five from Jamuna Bank and eight from Shahjalal Islami Bank.  Muhammad Yasin Ali, the Deputy Managing Director of the Prime Bank is among them.

The ACC submitted charge-sheets in the 12 cases in 2015, and only one verdict has been delivered so far. 

In 2018, the Special Judges Court 10 in Dhaka sentenced nine people, including Solaiman and Nowrin, to prison for 10 years and also fined them.

ACC lawyer Mosharraf Hossain Kajol said the court was hearing depositions in four of the remaining 11 cases. 

There are over 50 witnesses in each of the lawsuits, he said.   

"Trials are moving slow in the court because witnesses often are not present," Kajol added. 

Farmers Bank (Now Padma bank)

In April 2014, the ACC filed a case with Gulshan Police Station against five people, including Farmers Bank's former audit committee chairman Mahbubul Haque Chisty (Babul Chisty) and his wife, over misappropriation of Tk160 crore from the bank.  

The ACC submitted the charge-sheet in April last year but the trial has not started yet.

Farmers Bank was renamed Padma Bank after the scandal.

ACC counsel Md. Hossain said the Special Judges Court 1 in Dhaka was hearing the case but charges had not been framed yet.  

In December last year, the ACC filed five more cases against five of Chisty's family members, including Chisty himself. They were accused of amassing over Tk135 crore through illegal means.  Charge-sheets have not been submitted yet.

Chisty has also been accused in seven more cases for embezzling funds from the Farmers Bank. Charge-sheets in this case also have not been submitted yet.

'Authoritative hands involved in swindle'

Iftekharuzzaman, the Executive Director of the Transparency International, Bangladesh (TIB), said delays in trials had become a common practice in Bangladesh.   

He said that the ACC was reluctant in investigating scam cases.

"For instance, the ACC is deliberately delaying the investigation related to the swindle of Basic Bank," Iftekharuzzaman said adding that some time trial process was delayed due to intervention of influentials.