Southeast Bank chairman accused of money laundering, corruption

Five founder directors of Southeast Bank Limited have raised allegations of corruption, irregularities and money laundering against incumbent Chairman Alamgir Kabir.

They sent a letter to Bangladesh Bank Governor Fazle Kabir on July 26, saying the bank’s deposits are in danger because of the chairman’s corruption, fraud and money laundering. The Business Post has obtained a copy of the letter.

The directors are - MA Kashem, former chairman of the bank; Azim Uddin Ahmed; Duluma Ahmed, current vice-chairman of the bank; Rehana Rahman and Jusna Ara Kashem. They urged the BB to investigate the allegations against Kabir, his cronies and syndicate.

The rift between the founder directors and the incumbent chairman became public at the bank’s 26th annual general meeting (AGM) on June 30. Five out of the bank’s nine directors skipped the virtual AGM.

In their letter, the directors said Kabir had been at the bank’s helm for the last 17 years, giving rise to dissatisfaction among the founder directors, employees and shareholders.

It noted that other directors and shareholders were “very annoyed” over the monopoly power of Chairman Kabir as his corruption and irregularities put the depositors’ money at risk.

On July 28, Kabir told The Business Post that he was aware of the allegations. “I know everything, but I don’t want to say anything against my colleagues,” he said.

The directors accused Kabir of “lending to his relatives; waiving interest on current loans without following rules and regulations”.

The directors claimed that Kabir had given loans to various “ineligible companies”, bypassing all other directors, and he took “special benefits” from the clients for issuing the loans.

According to the letter, Kabir unilaterally granted considerable loans to Bay Leasing and Investment Ltd, a non-banking financial institution controlled by his family. Bay Leasing’s balance sheet did not show more than Tk 400 crore in loans it had taken.

The letter said that the bank had illegally given interest waiver facilities of Tk 54 crore to the Lub-Rref Bangladesh Limited, owned by a close relative of Kabir.

The directors claimed that Kabir had disbursed over Tk 1,500 crore in loans in exchange for commissions from clients.

Southeast Bank showed its interest income at Tk 281 crore in the bank’s annual report for 2020, but the lender’s interest income was Tk 781.45 crore. There are irregularities worth Tk 500 crore, the letter noted.

Recently, the bank has set up 185 cash recycling machines (CRM) at its various branches, and another 300 machines are in the process of import. The directors claimed Southeast Bank bought these CRM at higher prices than the market rate, adding that the bank’s chairman diverted funds abroad through over-invoicing.

“The diverted fund has been invested in three companies of Raiyan Kabir, son of Alamgir Kabir, in Singapore. The companies are- R & N Trade Holdings Pte Ltd, E-exchange Singapore Pte Ltd and R & N Marine & ship Trade Pte Ltd.” Raiyan Kabir is also a director of Southeast bank. Alamgir Kabir was the founding director of Asia Insurance ltd, but last year, he resigned from his post due to the objection of the Bangladesh Bank, said the directors’ letter adding that he had forced the bank’s officials to take insurance service from Asia Insurance Ltd since he joined the bank.

The letter alleged that Kabir has vast wealth and assets in Singapore, Malaysia, Dubai, Canada and Australia. Besides, he owns half a dozen expensive flats in posh areas of the capital.

The five founding directors also raised allegations of corruption against the chairman about the bank’s purchases and stimulus disbursement.

MA Kashem, the founder chairman of the bank and Azim Uddin Ahmed, sponsor director of the bank, declined to comment on the issue.

Bangladesh Bank’s Executive Director and spokesperson, Md Serajul Islam said he knew nothing about the letter. He said the central bank would take action through its department concerned if the letter is sent to the governor.

At the end of March this year, the total outstanding loans of Southeast Bank stood at Tk 32,284.23 crore, while its non-performing loans stood at Tk 1,412.42 crore, which is 4.37 per cent of the total outstanding loans, latest BB data show.