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People’s Leasing changing name amid survivability doubts

Staff Correspondent
24 Dec 2023 21:45:12 | Update: 25 Dec 2023 11:41:28
People’s Leasing changing name amid survivability doubts

Peoples Leasing and Financial Services Ltd – a scam-hit firm that wrote off 99 per cent of its total loans as bad debt – has decided to change name to Sonar Bangla Lease Finance PLC in a bid to attract new investments.

The non-bank financial institution (NBFI) announced this decision on the DSE website on Sunday. Although the auditor gave its opinion on the company’s latest 2021 financial report last October, there are doubts about the company's continued existence.

This firm says an extraordinary general meeting (EGM) has been called for the name change on December 26. At the same time, if the approval of Bangladesh Bank is received, the company will soon start business under a new name.

The NBFI plunged into severe trouble as Prashanta Kumar Halder, commonly known as PK Halder, swindled around Tk 3,500 crore from several financial institutions, including People's Leasing.

The High Court-appointed board of People’s Leasing has proposed several plans to revive the NBFI, including fresh capital injection through partnership, loan recovery, and proper utilisation of its assets.

People’s Leasing Company Secretary Armia Fakir told the Business Post, “The firm has a bad reputation. Since our new board wants to get rid of the old name of the company and manage it in a new way, the name change is necessary.

“We cannot attract new investments under the old name.”

However, according to its audited report for 2021, People’s Leasing has been adversely affected by default loans, with classified amounts reaching 99 per cent of the total disbursements.

Auditor opinion

In the company’s 2021 financial report, the auditor mentions that loans and advances have been disbursed amounting to Tk 105.53 crore by the company in favor of its subsidiary PLFS Investment Ltd, which exceeds the sanction limit of the loan.

This loan is also in excess of 30 per cent of the company’s capital and reserves, which is a noncompliance of the Financial Institutions Act 1993.

When the auditor asked the subsidiary for the documents regarding the loan, the company said that no information was provided by the parent company.

The auditor stated that the financial statements show that the company has an accumulated loss of Tk 3,710.80 crore for the year ended December 31, 2021; negative equity of Tk 3,258.94 crore as of December 31, 2021; a negative capital adequacy ratio of 217 per cent as against a minimum of 10 per cent; 99 per cent of the investment of the company is classified; the cash reserve ratio (CRR) and statutory liquidity requirement (SLR) requirements could not be met throughout the year; and investment disbursement is very poor.

“Because of this, a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern.”

An Auditor opinion, typical after a professional audit, indicates that the information provided may be limited in scope, or that the company's adherence to generally accepted accounting principles may be questionable.


In July 2019, the stock exchanges in Dhaka and Chattogram halted trading of People’s Leasing shares to protect investors’ interests.

Following a direction from the High Court, People's Leasing held its annual general meeting (AGM) in October of this year, after a six-year break. The AGM for 2021 was held; one has not yet been held for the year prior.

Since it opened for business in 1996, People's Leasing is said to have encountered numerous financial frauds. The Bangladesh Bank responded by appointing an observer at the business in 2015.

The company's board then notified the central bank of the company's inability to reimburse its depositors upon maturity, and the liquidation process commenced in April 2019.

Reorganising the board of directors, however, was a lifeline the High Court provided to the floundering NBFI in July 2021, preventing the corporation from going out of business.