Public Accounts Committee for legal action against default firms

The Public Accounts Committee has directed the Investment Corporation of Bangladesh to take legal action against 19 defaulting companies that failed to repay Tk 143.59 crore loan secured from the Equity and Entrepreneurship Fund in Fiscal Year 2014-15.

Besides, it also asked the ICB to undertake a joint initiative with the banks and financial organisations concerned for a prompt recovery of the loan.

Bangladesh Bank Executive Director Md Sirajul Islam said commercial banks and financial organisations have liability along with the ICB and the central bank in distributing the EEF fund.

So, action should be taken against the officials of these organisations involved in irregularities relating to loan distribution, he suggested.

Midas Finance Limited Managing Director Mustafizur Rahman said six companies are connected with them, of which one has already paid its loan.

“We are keeping contact with four other companies, and we do not know the whereabouts of one. However, we are trying to recover the loan,” he added.

Member of the parliamentary watchdog Abul Kalam Azad told The Business Post it is a long process; banks and financial organisations have already started working on loan recovery.

Along with filing cases against the defaulting companies they will also go for a joint initiative for prompt recovery of loan, he said.

According to the 2015-2016 audit report, a food processing company took a loan of more than Tk 13.18 crore from the EEF while a Naogaon company was provided with loan without inspecting much about the enterprise.

Around Tk 9.67 crore was embezzled by moving the entrepreneur’s EEF loan to another project.

A Rangpur-based company was given a loan of Tk 9.76 crore from the EEF without preserving its land documents, said the report.

Although the project of another Mymensingh-based company is running, no profit came out of it, thereby failing to repay Tk 8.61 crore.

Shying away from the EEF policies and assisting a company without following conditions caused a financial loss of Tk 7.81 crore to the EEF.

The story of irregularities continues as the EEF counted another loss of Tk 7.54 crore from undue loan assistance to a Faridpur-based company and Tk 7.50 more to a company in Barishal.

A Shariatpur company took a loan of Tk 6.32 crore by submitting fake project documents while an unregistered fertilizer company was provided with approximately Tk 5.94 crore.

A company in Rangpur shut down the project after securing a loan of Tk 5.79 crore from the EEF while Gaibandha’s Royal Agro Farm and its associate organisations also failed to pay, causing a loss of more than 5.66 crore.

Without assessing the probability of a project, a Tk 5.25 crore was provided to another company.

The EEF counted a loss of Tk 4.19 crore after a company received a deduction from loan based on a fake inspection report.

A Jhenaidah-based company caused a loss of around Tk 3.31 crore to the EEF as it failed commercial production. It also got loan deduction despite having no approval from the authorities.

Another company got loan deduction after submitting fake inspection report, causing a loss of Tk 3.59 crore to the EEF.

Talking about the irregularities, Chairman of the Board of Directors of Investment Corporation of Bangladesh (ICB) Md Kismatul Ahsan told The Business Post although the EEF fund was launched with a positive aim, but due to irregularities of some officials and entrepreneurs it failed to sustain decency.

“Now the Public Accounts Committee has come ahead to recover the loan. Simultaneously, the Bangladesh Bank, the ICB, and the banks and financial organisations concerned are taking steps in this regard,” he said.

Legal actions will be taken if any officials are found involved with the graft, he said, adding that the EEF loan is distributed in three installments, and why they (officials) failed to spot irregularities of the entrepreneurs while providing the first and second installments is a big question.