Monday, 17th January, 2022
Monday, 17th January, 2022
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Khaleque-Nazrul embezzle-laundere Tk 2,125cr

An investigation of the Bangladesh Securities and Exchange Commission found that the owners of Fareast Islami Life Insurance Company Limited embezzled and laundered more than Tk 2,125 crore from the company in the past decade.The BSEC shared its investigation report recently with finance ministry and Bangladesh Financial Intelligence Unit to look into the matter.Former FILICL chairman Md Nazrul Islam, managing director Md Hemyet Ullah and sponsor MA Khaleque are particularly found to have actively planned and executed the related party transactions, forged documents and ultimately laundered corporate resources to their private gains, the report said.Of the total Tk 2,125 crore, the persons embezzled Tk 854 crore through unlawful land acquisition of FILICL, Tk 659.67 crore by investment in their firms and Tk 421 crore through taking bank loans against companies Mudaraba Term Deposits and Tk 191 crore through opening two fraudulent corporate societies.The value of this embezzled amount stood at Tk 3,700 on June 30, 2021, assuming that the company had invested the sum in risk-free 10-year government bonds with a 10 per cent rate of return, according to the investigation report.BSEC chairman Shibli Rubayat-Ul-Islam told New Age that the regulator also reported the matter to some other relevant authorities for taking a decision.The commission has already restructured the board of the company to stop the criminal activities, he said.The commission on August 9, 2021 reconstituted the companys board of directors by appointing 10 independent directors. The commission in its investigation found the record of twelve unlawful acquisitions of land at abnormally high prices to embezzle a total of Tk 858 crore.Nazrul Islam had been the chairman of the company since 2010 until his removal on September 2, 2021 and serial financial crimes and money laundering took place during his tenure, the report said.The company purchased a total of 28 decimals of land at a total cost of Tk 172 crore on May 12, 2015 from Nazruls father-in-law Md Mofijul Islam and brother-in-law Md Selim Mahmud.Mofijul and Selim purchased the land at a total cost of Tk 19.58 crore on July 8, 2014.Besides, the FILICL on March 3, 2014 decided to buy 33.56 decimals of land and an old building for Tk 207.36 crore from two brothers Azahar Khan and Sohel Khan, who are the business partners of Nazrul Islam.

Azhar Khan bought 15.3 decimals of the land at 12.85 crore and Md. Sohel Khan bought the remainder 18.26 decimals at Tk 8.70 crore at the beginning of 2014, and then sold the aggregate 33.56 decimals to Fareast Life at 207.37 crore on March 16, 2014.The two related party transactions, therefore, led to money laundering of Tk 406.94 crore from FILICL to the ultimate benefit of Nazrul Islam, the BSEC report said.New Age could not reach Nazrul and Khaleque, the two key accused, for comments.FILICL company secretary Mahamudul Hasan said that the company didn’t receive any investigation report from the BSEC, and thus, couldnt comment on the issue.The BSEC revealed that the company made Mudaraba Term Deposits (MTDRs) with different commercial banks, forged resolutions of the board meetings, and facilitated those banks to extend loan facilities to 13 related parties, including sponsor directors and entities which are either owned or controlled by sponsor directors and top management executives.When the related parties, who had borrowed from banks against lien of MTDRs, failed to repay the loans plus interests on it the lending banks liquidated MTDRs of FILICL.MA Khaleque borrowed Tk 312.98 crore against the lien of the MTDRs of the company and then ultimately defaulted. The adjustment amount was Tk 421 crore.The MTDR opening balance was Tk 1,562 crore on January 1, 2016 and an additional Tk 525 crore was deposited in the next three years, but only Tk 404.4 crore was found at the end of 2018.It, therefore, appears that cumulative encashment of Tk 1,682.6 crore happened during this period, the report said.A part of this amount is an addition to Tk 2, 125 crore that had been allegedly plundered.An investigation is ongoing to identify the volume of resources tunnelled from FILICL during 2010-20, it said.ÔAuthentic evidence revealed that FILICL booked Tk 659.7 crore against the liquidation of corporate MTDRs as of 31 December 2018,Õ the report said.Nazrul Islam has also been chairman of the board of trustees of Prime Asia University and Prime Asia Foundation, the two entities, where FILICL unlawfully invested Tk 104.6 crore and Tk 23.03 crore respectively.The sponsor directors including Nazrul Islam, MA Khaleque, KM Khaled, Taslima Islam, lffat Jahan, Ayesha Husne Jahan, and Rabeya Begum, are individually and/or jointly involved in PFI Securities Ltd., Prime Asia University, Prime Foundation, PFI Properties, Mithela Properties Ltd. Mithela Textile Industries, Azad Automobiles and Makson Associates, which in turn received Tk 686.1 crore as investments from FILICL.`These are unlawful related party transactions leading laundering of cash of FILICL,` the report said.FILICL had opened two fraudulent cooperative societies – Fareast Life Islami Insurance Company Employee Cooperative Society and Prime Islami Life Insurance Company Employee Cooperative Society in 2013 and 2016 respectively.FILICL made advance payments of Tk 120.06 crore and Tk 71.15 crore to FILICL ECS and PILICL ECS respectively, but the money actually did not reach the bank account of either of the cooperative societies.

The commission also wrote to Bangladesh Financial Intelligence Unit on November 1, 2021 to form a joint inquiry and investigation committee that can be comprised of officials from the commission, Anti Corruption Commission and Criminal Investigation Department (CID) of Bangladesh Police. Total policy holdersÕ claims shot up to Tk 1,655.97 crore on December 31, 2020 against Tk 716.74 crore on December 31, 2019.The life fund of FILICL was Tk 2,474.57 crore as of December 31, 2020, reducing from Tk 3,372.6 crore in the previous year.Transparency International Bangladesh executive director Iftekharuzzaman told Daily Economist that the insurance sector had been grappling with various corruption and irregularities, failures in claims settlement that ultimately caused a lack of confidence and trust in the sector.`The Insurance Development and Regulatory Authority continued failing to eradicate the corruption due to inefficiency,` he said. As IDRA wasn’t empowered to punish corrupt people, other arms of the government, including Anti-Corruption Commission, should be engaged to ensure the punishment of the errant individuals, he added.

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