Cenbank sues Nagad’s ex-top brass for Tk645cr e-money fraud
On behalf of Bangladesh Bank, Sarkar Mohammad Amir Khasru, joint director of the central bank’s Payment Systems Department, filed the case with Motijheel Police Station
The Bangladesh Bank has taken legal action against Nagad's former chairman Syed Mohammad Kamal, ex-managing director and CEO Tanvir Ahmed Mishuk, and 22 others, accusing them of embezzling funds through fraudulent issuance of Tk645 crore in e-money without maintaining the required currency reserve.
Such unchecked money creation, experts said, could stoke inflation, erode the value of the taka, and push up the cost of goods and services.
Sarkar Mohammad Amir Khasru, joint director of the BB's Payment Systems Department, filed the case with Motijheel Police Station yesterday, a central bank official told TBS today (3 February).
Other accused in the case include former Nagad directors – Shafayet Alam, Maruful Islam Jhalak, Aminul Haque, Niaz Morshed and Faisal Ahsan Chowdhury.
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Earlier, on 12 January, Governor Ahsan H Mansur, addressing a seminar in Dhaka, said the central bank had detected irregularities amounting to Tk2,300 crore including excess creation of e-money worth Tk600 crore in Nagad.
"An investigation is ongoing to uncover irregularities in Nagad. We want to ensure good governance there. Subsequently, new investments will be invited. In the future, we aim to take Nagad to the top," he said.
Former MD Mishuk's response
When contacted, former Nagad MD and CEO Tanvir A Mishuk told TBS, "We had previously been informed by various sources that a case would be filed. Now it is confirmed. Several former top officials of Nagad and some former officials of the Directorate of Posts have been sued."
"What is surprising, however, is that the case was filed based on false and fabricated information," he said.
"In the case statements, they [central bank] claim there is a deficit of Tk645 crore in e-money at Nagad. However, this is fabricated information, as they may not have noticed that the Bangladesh Bank sent us a letter last November. The letter clearly states, 'The deficit of e-money at Nagad is Tk48.60 crore,'" he said.
"The Bangladesh Bank-appointed administration team took over Nagad immediately after the government change in August last year. So, the natural question now is — did they create this deficit? If so, it is their responsibility. Therefore, if a case is to be filed, it should be against them," he added.
"We believe the e-money deficit in question was created by Nagad's new administration team, and now they are trying to shift the blame onto us. We will take legal action in this regard very soon," said Tanvir.
Since its inception, Nagad leveraged the brand and resources of the Directorate of Post to rapidly grow its customer base to around nine crore, with its aggressive pricing of services and government contracts.
However, cashing in on government connections for undue privilege during the regime of ousted prime minister Sheikh Hasina has been an allegation against the company which its former CEO Tanvir denied.
Nagad under BB scanner since AL's fall
Nagad came under increased scrutiny by the Bangladesh Bank after the fall of the Awami League government on 5 August.
On 21 August, the central bank appointed its Director, Muhammad Badiuzzaman Dider, as the administrator of Nagad for one year. In addition, six other central bank officials were appointed to assist the administrator.
With the appointment of the administration team, Nagad's previous board was dissolved, and Tanvir A. Mishuk lost his position as MD. He was later dismissed from his CEO position by the new administrator
Nagad, which began operations as a mobile financial services (MFS) provider in 2019, faced controversy over its branding as a digital service of the Directorate of Posts, despite the government having no equity stake. Instead, it shared revenue with the Directorate of Posts.
A day after appointing the administrator at Nagad, Bangladesh Bank Governor Ahsan H Mansur in a press conference announced the suspension of the licence for Nagad Digital Bank PLC, stating that the central bank would review the process.
"Due to various irregularities and corruption, an administrator has been appointed to the institution," said the governor.
He said, "The organisation was previously managed under the name of the Directorate of Posts, but it is now taken over by the government for the public interest. Therefore, Nagad is now a fully government-owned entity."
All existing customer benefits will remain in place, so there is no reason for customers to be concerned, Mansur said, adding that Nagad will be developed into a more transparent and international standard organisation.
The governor also said, "The previous government [Awami League] provided many benefits to Nagad, particularly by distributing most government allowances through Nagad. To prevent such favouritism and ensure parallel competition, we want to ensure fair practices. All operations of the institution will continue as they were before, with no changes."
"The creation of electronic money and various practices that were previously done illegally were not appropriate. However, Nagad is not the only institution where irregularities have occurred; there have been many other institutions with similar issues," the BB governor added.
On 17 September, the Bangladesh Bank formed a management board – headed by KAS Murshid, former director general of the Bangladesh Institute of Development Research – to determine the future action plan and strategic management of Nagad.
On 12 September, Administrator Badiuzzaman filed a general diary (GD) against Tanvir A Mishuk with Banani Police Station, citing threats made by the CEO.
In the complaint, Badiuzzaman claimed that Mishuk had texted him on WhatsApp, saying, "You are misusing power illegally. You are trying to humiliate me personally, not professionally or legally. I will keep it in mind brother. Take care. Best wishes for your future."
"I feel threatened by the conversation. I humbly request that the matter be included in the general diary for the future," said Badiuzzaman.
However, on 14 December, a Dhaka court dismissed the general diary (GD).
