ACC sues UFS high-ups, ICB officials for embezzlement

Infographic: TBS

The Anti-Corruption Commission (ACC) today filed a case against 24 individuals, including high-ups of Universal Financial Solutions (UFS), officials of the Investment Corporation of Bangladesh (ICB), a trustee of UFS, and two auditors, for embezzling Tk311 crore of investors' funds over a year ago.

The embezzlement came to light in late 2022, and a special inspection by the Bangladesh Securities and Exchange Commission (BSEC) found evidence.

The commission then provided the information to the ACC for action in this regard. Subsequently, ACC Deputy Director Md Hafizul Islam filed the case with its integrated district office, Dhaka-1.

Earlier, the ICB filed two cases of money embezzlement, both of which are still under investigation.

According to the case statement, 14 of the defendants belong to UFS, an asset management company. The remaining accused include four former and current officers of ICB, two auditors, and the managing directors of four firms. Although UFS was supposed to invest in the four companies, it did not do so.

The defendants include UFS Chairman Syed Alamgir Farooq, Managing Director Sayed Hamza Alamgir, and directors Israt Alamgir, Alia Haque Alamgir, Syeda Shehrin Hussain, Syeda Mehreen Rahman, Maheed Haque, and Mohammad Zakir Hossain.

The accused from the ICB are Assistant General Manager Md Taleb Hossen, Deputy General Manager Mohammad Shahjahan, former assistant general manager Md Mahbub Alam, and former DGM Md Mosaddake-Ul-Alam.

Muhammad Zabel Ali Mridha of Ahmed Zaker and Co, and Mohammad Mofizul Haque Rinku of Rahman Mostafa Alam and Co are also accused in the case.

The other accused are Md Fakhrul Alam, proprietor of R I Enterprise, Taslima Rahman, director and chairman of Vangurd Traders Limited; Sarik Ahmed, managing director of Multimax International; and AIM Mahabubul Aalm, managing director of Tanzin Fashions.

The UFS MD could not be reached for comment as he is staying abroad after leaving the country for Dubai in October last year.

ICB MD Abul Hossain said, "I have heard that the case has been filed but have not received anything yet. We have also filed two cases over the embezzlement of money, which are being investigated by the CID."
Regarding the alleged involvement of officials, he added, "I don't know why ICB officials have been made defendants in the case.

They are not involved in money embezzlement; the names may also be due to neglect of duty. We will look into the matter."

A top BSEC official told TBS that the commission wrote to the ACC to take action after finding evidence of embezzlement.

He said, "The UFS officials embezzled the money, but the ICB, as a trustee and custodian, did not perform its proper duties. The duty officials did not provide information to the commission on time, and even if false information were provided, they did not verify it; there is negligence on their part."

According to the ACC case statement, Syed Hamza Alamgir and other defendants colluded to embezzle money through forgery.

It states that the mutual funds rules were violated through the transfer and conversion of investments in various bank accounts and business establishments held in the names of the accused, with the intent to conceal or falsify the nature, source, location, ownership, and control of illegal proceeds.

Misappropriation includes Tk59.40 crore by showing unauthorised investment in violation of these rules, Tk148 crore in fake fixed deposit receipts at various times, Tk63.87 crore by not depositing the proceeds of sold shares of the fund in the UFS fund, Tk7.89 crore as a mutual fund management fee, Tk31.76 crore as interest, and Tk59.24 lakh as a trustee fee.

Earlier, the securities regulator had banned audit firm Ahmed Zaker and Co from the stock market for collaborating with an asset management company to embezzle investors' funds.

In an order in January 2023, the regulator said the firm would not be allowed to audit the financial statements of any mutual funds or listed companies.

The four mutual funds that the UFSL embezzled from are UFS-Bank Asia Unit Fund, UFS-IBBL Shariah Unit, UFS-Padma Life Islamic Unit Fund, and UFS-Popular Life Unit Fund, with an initial fund size of Tk430 crore.