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Bangladesh’s new central financial institution chief has accused tycoons linked to the toppled regime of Sheikh Hasina of working with members of the nation’s highly effective army intelligence company to siphon $17bn out of the banking sector throughout her rule.
In an interview with the Monetary Instances, Ahsan Mansur — who was appointed Bangladesh Financial institution governor after Sheikh Hasina fled the nation in June — stated the Directorate Normal of Forces Intelligence had helped pressure takeovers of main banks.
Mansur stated an estimated Tk2tn ($16.7bn) had been spirited out of Bangladesh after the financial institution takeovers, utilizing strategies akin to loans made to their new shareholders and inflated import invoices.
“That is the largest, highest robbing of banks by any worldwide requirements,” he stated. “It didn’t occur on that scale anyplace, and it was state-sponsored and it couldn’t have occurred with out intelligence individuals placing weapons [to former bank CEOs’] heads.”
The governor stated Mohammed Saiful Alam, founder and chair of commercial conglomerate S Alam, and his associates had “siphoned off” not less than $10bn “at the least” from the banking system after taking management of banks with the assistance of the DGFI. “Daily they had been granting loans to themselves,” he stated.
In an announcement issued by legislation agency Quinn Emanuel Urquhart & Sullivan on behalf of Saiful Alam, the S Alam Group stated there was “no reality” to Mansur’s allegations.
“The co-ordinated marketing campaign of the interim authorities towards the S Alam Group and several other different main companies in Bangladesh has did not respect even fundamental ideas of due course of,” it stated.
“It has already undermined investor confidence and contributed to the deterioration of legislation and order,” the assertion stated. “Given the Group’s document and contributions, we discover the accusations by the governor . . . shocking and unjustified.”
The Inter Providers Public Relations Directorate, which handles media inquiries for Bangladesh’s armed forces, didn’t reply to a request for remark and the DGFI couldn’t be reached for remark.
Sheikh Hasina was in energy for a complete of twenty years in Bangladesh, a rustic of 170mn individuals and the world’s second-largest clothes exporter, however her rule was marred by allegations of vote rigging, the jailing and torture of opponents, and widespread corruption. The previous prime minister fled to India in August, and her present whereabouts are unknown.
The interim authorities headed by Nobel laureate Muhammad Yunus that took energy after her flight has repeatedly vowed to get well funds it claims had been misappropriated by members of the regime and their associates.
Mansur, a former IMF official who informed the FT final month that he had sought the assistance of the UK to probe the abroad wealth of allies of Sheikh Hasina, stated board members of main banks had been focused below her rule.
The board members had been “hijacked from their homes” by intelligence officers, taken to different places akin to lodges, and informed “at gunpoint” to promote all their shares within the banks to “to Mr S Alam” and to resign their directorships. “At one financial institution after one other they did it,” he stated.
One former financial institution CEO informed the FT he had been pressured to resign the place as a part of a forcible takeover. Mohammad Abdul Mannan, previously CEO of Islami Financial institution Bangladesh, one of many nation’s largest lenders, stated he got here below stress from “individuals related to the then-government” from 2013.
This included stress to recruit board members instructed by the prime minister’s workplace and a search by “individuals associated to authorities businesses” of a lodge room utilized by one of many financial institution’s overseas administrators.
Mannan stated that in January 2017 he was diverted on his technique to a board assembly and brought to see a senior defence official, then stored for a full working day to pressure him to resign.
“They ready financial institution letters on pretend stationery,” stated Mannan, who was appointed chair of First Safety Islami Financial institution by the central financial institution in September. “I needed to signal a resignation letter.”
S Alam diversified into banking over the previous decade. The group’s web site says it has “vital funding” in seven banks, together with Islami Financial institution Bangladesh and First Safety Islami Financial institution.
Mansur stated Bangladesh aimed to get well stolen funds after finishing an audit of a few dozen principally bankrupt banks taken over throughout Hasina’s time in authorities. “We wish to use that audit as proof within the court docket of legislation internationally and domestically,” the governor stated.
Bangladesh’s interim authorities moved to dam gross sales of shares within the banks after the Sheikh Hasina regime collapsed. Mansur stated authorities now deliberate to promote stakes within the banks to “good high quality nationwide or worldwide strategic traders” with the intention to recapitalise them. The central financial institution additionally deliberate to arrange an asset administration agency to handle or get rid of the banks’ distressed belongings.
He stated Bangladesh would additionally search to get well cash taken in a foreign country by hiring worldwide legislation companies to attempt to connect belongings held by the banks’ shareholders in Dubai, Singapore, the UK or elsewhere.
