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Mercantile Bank removes director Shaheed Reza for loan scandal

28 Apr 2021 17:48:36 | Update: 28 Apr 2021 17:49:08
Mercantile Bank removes director Shaheed Reza for loan scandal
AKM Shaheed Reza

Md Joynal Abedin Khan

Mercantile Bank Limited on Wednesday removed AKM Shaheed Reza from its board of directors at the instruction of the Bangladesh Bank for his alleged involvement in loan scandal.

The central bank issued an office order to Mercantile Bank’s chairman and managing director in this regard on Tuesday. It also barred Shaheed Reza from involving with the management process of Mercantile Bank or any other bank or company for next two years.

Md Serajul Islam, executive director and spokesperson of Bangladesh Bank, told reporters on Wednesday that the central bank on Tuesday issued the removal instruction to the bank’s chairman and managing director.

“Shahid was removed from Mercantile Bank’s board of directors as the allegations of loan irregularities against him were found to be true,” he said.

The allegations brought against him include – breaching loan regulations and being associated with the scams of PK Halder, he added.

According to the Bangladesh Bank letter, this decision was taken following all required procedures as per the provision 46 of the Bank Company Act, 1991.

The Bangladesh Financial Intelligence Unit and the Financial Integrity and Customer Services Department under the central bank have recently carried out investigations on the issue, said Md Serajul Islam.

"The two entities found allegations that Reza was involved with the irregularities to manage loans violating the rules and regulations. So, the central bank decided to remove him from the Mercantile Bank board,” he said.

The BIFU and the central bank inspection teams unearthed that Reza got a portion of loans, which were actually disbursed to PK Halder from International Leasing and Financial Services.
Shaheed Reza has a direct link with Halder, who recently fled the country after embezzling a large amount of money from different non-bank financial institutions, to siphon off money from ILFS.

Earlier, Shaheed Reza was served with a show-cause notice on January 6 and was asked to respond within the next 15 days. Reza submitted his explanation on February 3, but it failed to satisfy the central bank.

On April 4, Shaheed also placed his written explanation to a standing committee of the central bank.

The committee, however, found no logical ground of Reza’s explanations and recommended removing him from the board of directors of the bank.
Shaheed said that the loan taken by him was now unclassified and he was giving installments on time.

“ILFS disbursed a portion of loans to me from another loan account. And I did not have any involvement with the delinquent borrower. The NBFI did it without informing me,” he said.

He said that he would file an appeal with the central bank’s board seeking withdrawal of the decision.

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