Bangladesh Bank’s investigation into the huge loan scam in Uttara Finance and Investment Ltd reportedly inched a bit forward as sources said the initial checking of loan records by a senior central bank official is now over and recommendations being forwarded to higher level.
The Bank will now chart out its actions in the light of the decision of the higher level committee. Meanwhile, Bangladesh Securities and Exchange Commission (BSEC) on Monday has fined Shamsul Arefin, the Managing Director of UFIL taka five laks for hiding the loan information and misleading Bangladesh Bank’s credit information bureau.
It has also decided to appoint a special auditor to investigate the financial statements of the errant non-bank financial institution (NBFI) in which the country’s giant automobile distribution company Uttara Group has the bigger stake.
BB Spokesperson Md. Serajul Islam told The Daily Observer on Tuesday that the BSEC has used its authorities slapping fines on UFIL’s chief executive and taking such other measures. Bangladesh Bank will exercise its own powers for which one has to wait however until the higher level committee makes its own decision.
Meanwhile the bigger question remains how BB will retrieve the stolen fund and repay depositors and whether it will roll out a liquidation process at the end to recover so much money. Many wonder is there any leg dragging in view of the big influence of the company.
Meanwhile, the move by BSEC comes following the chairman of the regulatory body Rubayet-Ul- Islam told Journalist last week that they are going to take some definitive actions.
In recent weeks, BSEC has dispatched auditors to Ring Shine Textile, Shurwid Industries, Fareast Islami Life and Al-Haj Textiles after their activities raised eyebrows.
Uttara Finance has emerged as a hotbed for loan irregularities involving around Tk 6,000 crore following an inspection by a three-member team of the BB into NBFI’s books as of 2019. The loan irregularities include sanctioning huge loan to company directors and other fake businesses without information to central bank’s loan watchdog.
Subsequently, on December 1, UFIL sought unconditional apology for the loan scam. Since news broke of Uttara Finance’s share price declined 13.8 per cent on January 10. On Monday its share price closed at Tk 43.6.
Uttara Finance, established in 1995, is listed in ‘A’ category in the share market and provided 15 per cent cash and 5 per cent stock dividends for its 2019 financial year. However, between July and September of last year, it logged losses of about Tk 15 crore, in contrast to a profit of Tk 33.6 crore a year earlier.
At the end of September, Uttara Finance’s deposits stood at Tk 2,073.6 crore, up 8.7 per cent year-on-year. Its loans stood at Tk 3,440.5 crore at the end of September, in contrast to Tk 3,431.3 crore. Uttara Finance could not be reached for comment.