The auditor of Peoples Leasing and Finance Services Limited, a non-bank financial institution (NBFI), said the NBFI could not produce any documents in favour of loans of Tk 105.53 crore it disbursed to a subsidiary company.
Also, the auditor could not confirm a letter of guarantee of the non-bank worth Tk 15 crore due to lack of necessary documents.
The auditor said this in a qualified opinion after auditing the NBFI'’s financial statements for the years 2020 and 2021.
Peoples Leasing and Finance Services Limited disbursed that undocumented loan of Tk 105.53 crore to its subsidiary— PLFS Investment Ltd.
But, the sanction limit of the loan and being the loan 30 per cent excess of the company's capital and reserves, is a breach of the Financial Institutions Act 1993.
The auditor said on this matter, “We have requested the management of the subsidiary company to confirm to us directly about their loan balance, but they responded to us referring to a letter sent by them to the parent company demanding evidence in support of the disbursed loan against which they are yet to receive a reply.”
Peoples Leasing and Finance’s borrowings from other banks, financial institutions and agents include TK 396.43 crore being loan balance with various banks and FIS carried forward from earlier years in support of which all loan statements and confirmations from banks were not available, the auditor also said in the qualified opinion note.
The auditor stated in the company's 2021 financial statement that the company sold bon-banking assets, but the asset was derecognized and loss on disposal was not recognized as explained in the financial note.
No deductions have been made as per 'Prudential Guidelines on Capital Adequacy and Market Discipline for Financial Institutions' when calculating eligible regulatory capital. Had the deductions been made, eligible capital disclosed in the financial statement 2020 would have been reduced by Tk 33.32 crore, the auditor said.
Dividend and financial status
On Sunday, People's Leasing and Financial Services released its dividend and financial results for the previous three years.
According to disclosures made on stock exchanges, the publicly traded company has not declared any dividends to its shareholders for 2019, 2020, and 2021.
The NBFI had a loss per share of Tk 22.32 in 2020 and Tk 14.40 in 2021.
The newly formed board is working to hold annual general meetings (AGMs) on October 29 via an online platform in accordance with the High Court ruling as well as the regulations.
People's Leasing, which began operations in 1996, is said to have been subject to several financial frauds since 2004, for which the Bangladesh Bank set an observer at the company in 2015.
In addition, the central bank fired five directors from the board of the NBFI in 2015 over allegations that they were complicit in the theft of Tk358 crore.
At the business's board alerted the Bangladesh Bank of its inability to repay its depositors at maturity, the liquidation procedure for the company got under way in April 2019.
According to the stock exchanges, the Dhaka and Chattogram bourses banned the trading of People's Leasing shares in July 2019 for the benefit of investors.
