Home ›› 29 Aug 2021 ›› Front
It has become a sickening practice among public sector banks in particular to cook up the books in favour of an industrial group and thereby violate the bank company act.
The state-run Agrani Bank provided Letters of Credit (LC) facility to a defaulting company of Tanaka Group in 2020, concealing its credit information in the Credit Information Bureau (CIB) report of the bank.
The information of loan sanction to the defaulting industry surfaced at the 678th board of directors meeting of Agrani Bank.
The Bangladesh Bank on July 19 sent a letter to the bank seeking explanation about the irregularities within seven working days. The central bank, however, rejected the explanation of the bank as it was not satisfactory to the BB.
The letter said Agrani Bank opened up an LC worth Tk 13.64 crore in January 2020 on behalf of Swiss Quality Paper (BD) Ltd, a sister concern of Tanaka Group.
Later, it extended another Tk 12.83 crore LC facility to the same business in October of the same year despite the fact that the group of companies had defaulted on its loans with two other banks.
By the time Agrani Bank provided LC facility to Swiss Quality Paper Ltd, the latter had a default loan of Tk 103.65 crore, as per the BB observation report over the minutes of the bank’s board of directors meeting.
The report said Mytas Spinning Mills Ltd, another sister concern of Tanaka Group, had a Tk 54.24-crore default loan with state-run Sonali Bank when Agrani Bank came up with the credit facility.
This proves that Agrani Bank has consistently violated the section 27 of the Bank Companies Act 1991 in favour of the industrial group, as per the BB letter.
Any bank or financial institution will not be eligible to provide any loan to a defaulter, as per the section 27.
Agrani Bank gave out loan to the group of industries ignoring its credit status and their explanation is not satisfactory in this regard, a central bank high-up said, preferring to remain anonymous.
He opined that the central bank can impose disciplinary action on the bank under sub-section 11 of section 109 of Bank Company Act because of section 27 violation.
“The central bank could impose a fine of a maximum Tk 10 lakh for this,” hinted the banker.
Marhaba Spinning Mills Ltd, another sister concern of Tanaka Group, has over Tk 208 crore classified loan with Agrani Bank.
The bank rescheduled the loan in January last year but did not mention it in the CIB report. Now, the loan stood at Tk 269.08 crore.
The state-run lender did not mention the liability of Swiss Quality Paper (BD) Ltd as well as the rescheduled loans of the group in its CIB report – a clear violation of section 109 of the Bank Company Act, reads the BB letter.
Quizzed, Agrani Bank Managing Director and CEO Mohammad Shams-Ul Islam explained that once the group was in a bad state, but now it is conducting business smoothly due to which the LC facility was awarded.
“The group’s default loans have been rescheduled later. I have heard that the default loan of the group with Sonali Bank has also been rescheduled,” said the bank chief.
About the hiding of credit status in CIB report, Agrani Bank MD gave the version that they did not intentionally hide it.
“It has been late to report to the CIB about credit information because our LC activities are manual. But we are working on upgrading our system,” he claimed.
Agrani Bank lent around Tk 545 crore to various companies of Tanaka Group from 2013 to 2016. The BB in 2016 found various irregularities in those loans.
The banking regulator in July 2016 removed then Agrani Bank managing director Syed Abdul Hamid in connection with illegally sanctioning loans to Tanaka Tradecom International, a company of Tanaka Group, and also several other companies.
Tanaka Group owner Mohiuddin Mahin has various business entities located in Keraniganj and Gazipur. Swiss Quality Paper (BD) Ltd, Mahin Apparels, Marhaba Spinning Mills Ltd, Tanaka Tradecom International, Tanaka Petrol Pump and Tanaka Shopping Complex belong to the group.
The total loans owed by the six sister concerns of Tanaka Group with Agrani Bank stood at over Tk 766 crore as of June 2020.
Now the loan payments are irregular as all import, export and business activities of the group remain closed from 2017 to 2019 due to loss in businesses, said the central bank observation report.
The Business Post correspondent tried to catch up with Tanaka Group owner Mohiuddin Mahin over phone but to no avail. He cellphone was switched off.
