Beleaguered FAS Finance in search of revival plan

The new board of FAS Finance, crippled by PK Halder's massive loan scandals, is in search of a revival plan to bring the non-bank financial institution (NBFI) back into the business.

Recently, the NBFI has invited tenders from corporate financial advisory service providers to develop revival plans. Merchant banks like IDLC Investment and Riverstone Capital have shown interest in the call.

This correspondent phoned FAS Finance's current Chairman Mohammed Nurul Amin for comments but he did not answer.

A senior official of the company said on condition of anonymity that its financial health is very poor. The process of hiring a financial consultant is underway to recover from that. Negotiations are underway with several institutions. Agreements will be made soon with those whose plans are good.

He further said that most of the loans of the financial institution are not recoverable. However, they are struggling to run the office by realising the remaining loans.

Earlier on 31 May last year, in order to protect the interests of investors, the Bangladesh Securities and Exchange Commission (BSEC) restructured the board of FAS Finance.

The commission nominated five independent directors.

From them, Mohammed Nurul Amin, former managing director of NCC Bank and Meghna Bank Ltd, has been selected as chairman of the company.

Four others are Mohammed Saifuddin Khan, an associate professor at Dhaka University; Brigadier General Abu Sayed Mohammad Ali; Dr Syed Abdulla Al Mamun, deputy chief executive officer of Credit Rating Information & Services Limited; and Mohammad Salim, faculty member of the Bangladesh Institute of Capital Market.

The new board appointed Pritish Kumar Sarker as the managing director of the NBFI.

Earlier, he was a deputy managing director of Southeast Bank. The new board also changed the senior management as most of the former officers are accused of loan scams.

To protect investors' interests, the new board also appointed an auditor to find out irregularities and assess the present situation of the non-banking financial institution.

The official said the auditor had submitted the report and work is being done on the basis of this report.

In 2019, the company plunged into big trouble because of loan scams, particularly by controversial businessman Prashanta Kumar Halder, who is known as PK Halder.

According to an Anti-Corruption Commission (ACC) report, using entities like People's Leasing and International Leasing, PK Halder has also swindled Tk1,300 crore from FAS Finance in the name of several companies that exist on paper only.

Sources said the company was earlier run by Nitol Niloy Group.

Abdul Matlub Ahmad, chairman of the group, and his family members administered various activities of FAS Finance as nominated directors.

According to sources, corporate practice in FAS Finance was sound till 2012.

But Abdul Matlub Ahmad and his family members later began veering away from this company. Finally, they sold all the shares of the company in 2014.

P&L International and Reptile Farm, which are allegedly responsible for the downfall of the company, bought the most shares of FAS Finance.

Both P&L and Reptile are owned by PK Halder, a fugitive in a case filed by the ACC.

On 15 May, PK Halder was arrested by Indian law enforcement agencies. He is currently on trial in an Indian court. Shares of FAS Finance rose 13% on news of his arrest.

At present, the company's shares are being traded at Tk5 on the Dhaka Stock Exchange.