High-profile scams propel country into financial mire
Scams keep taking place as no timely action taken in past: expertsShakhawat Hossain
A series of high-profile financial scams coupled with alleged misappropriation of public find through controversial rental power plants are leading the country to financial ‘bankruptcy,’ experts said.
Available public data say that around Tk 30,000 crore has been misappropriated alone in three cases — share market collapse, illegal banking activities by Destiny Multipurpose Society Limited and the recently-in-focus Hallmark Group scam in the state-owned Sonali Bank.
Moreover, purchase of electricity from the privately owned plants at an average rate of Tk 17 cost the public exchequer Tk 32,000 in subsidy in the past financial year.
Influential figures of the ruling party who set up the plants are mostly benefited from the exorbitant rate, said economist Anu Muhammad, also a leader of the national committee to protect oil, gas, mineral resources, power and ports.
Experts said that the misappropriation of public fund in the power sector was delicate but the embezzlement of fund in the financial sector was shocking.
They said that such misappropriation continued happening as no governments in the past had taken any timely action against such matters.
The share market scam of 2010 rendered hundreds of thousands of marginal investors penniless. Retail investors lost at least Tk 20,000 crore to dishonest traders who were in collusion with stock market regulators, according to a government investigation.
The biggest state-owned commercial bank Sonali Bank is now tottering in the wake of the single largest swindle of about Tk 3,600 crore by the Hallmark Group and five other companies.
The Destiny Multipurpose Cooperative Society Ltd has
been involved in illegal banking throughout the country and has misappropriated at least Tk 5,000 crore.
They said that such gross financial embezzlement, in an impoverished country like Bangladesh, is possible only because of the collusion between greedy businessmen, politicians and government officials.
Transparency International Bangladesh’s executive director Iftekharuzzaman told New Age that the state is being at the diktats of a section of very powerful people who are patronising crooked businessmen.
‘This is leading the country to a state of bankruptcy,’ he said.
The TIB chief pointed out that failure by the successive governments to bring the culprits to the book was the main reason behind the continuation of huge financial scams.
Iftekharuzzaman pointed out that the present government did not do anything to punish the persons identified as being involved in the huge share market scam as per the findings of a probe body.
Bangladesh Bank’s former deputy governor Ibrahim Khaled was appointed by the government to lead the probe body after the worst-ever collapse of the capital market.
The DGEN, the key index of the share market, lost 21 per cent in one month between December 2101 and January 2011, allowing the market manipulators to pocket about Tk 50 billion in just one month.
Ibrahim Khaled said the government has not taken any action against the guilty parties.
No doubt they are powerful, but they are not stronger than the government, he said, adding the investors have lost confidence because of the government’s inaction.
The DGEN continued its fall through 2011 and is now hovering at around 4,000 points from close to 8,900 points during the October-November period in 2010.
Destiny, a multi-level marketing company, was collecting savings from its members despite repeated objections by officials of the Bangladesh Bank.
But for some inexplicable reason the officials failed to take timely action by freezing the suspected bank accounts and allowed Destiny’s executives to withdraw more than Tk 40 billion early this year.
Destiny used to keep many high officials in its pay-roll in order to do its illegal business uninterruptedly for the last 10 years. Former army chief and war hero, Lieutenant General (retired) Harunur Rashid, is the group’s president.
With the Destiny issue still remaining unresolved, Hallmark Group’s scam rocked the whole financial sector. The group and its five shady sister concerns embezzled Tk 3,547 crore from Sonali Bank’s Ruposhi Bangla Hotel branch between 2010 and May this year by using fake documents.
Of the Tk 3,547 crore, Hallmark Group alone took away Tk 2,686.14 crore, T and Brothers Tk 609.69 crore, Paragon Group Tk 146.60 crore, Nakshi Knit Tk 66.36 crore, DN Sports Tk 33.25 crore and Khanjahan Ali Tk 4.96 crore.
White collar crime like bank loan default has been persisting under successive governments once it began in the 1980s during the era of dictator HM Ershad.
But the swindles in the financial sector under the Awami League government have eclipsed all the previous ones.
‘The incidence of financial crimes in recent years is higher than those of the previous years,’ said the Anti-corruption Commission’s chairman, Ghulam Rahman.
He told New Age on last week that regulatory and administrative bodies have completely failed to perform their duty.
‘Things have worsened further because of the slowness of the existing judicial system,’ he added, indicating the time-consuming investigation and trial process which is often marred by political intervention.
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