Beximco Group, controlled by the ousted prime minister Sheikh Hasina鈥檚 adviser Salman F Rahman, has allegedly withdrawn about Tk聽50,000 crore from different banks and non-bank financial institutions, using political clout and circumventing banking norms.
Of the amount withdrawn, Tk聽23,120 crore or nearly 47 per cent has turned into non-performing loans, wreaking havoc on the country鈥檚 financial sector.
A Bangladesh Bank inspection team found that Beximco Group had used 169 companies out of its total 188 companies to acquire total Tk聽49,172 crore in loans as of September 2024, according to a central bank report.
Of the total loan amount, 15 banks provided Tk聽48,082 crore and seven NBFIs Tk聽181 crore while a number of banks invested in Beximco鈥檚 Sukuk Tk聽909 crore, the report said.
Janata Bank alone provided Tk 23,912 crore to 29聽 Beximco firms, of which Tk 19,507 crore is now defaulted, leaving the bank at the brink of collapse, the report said.
These banks extended to Beximco Group substantial financial benefits, including repeated loan rescheduling, extended repayment period, additional loans and letters of credit facilities, bypassing permissible limits and prudent practices.
Salman used not only his own companies but also set up shell entities to withdraw such a massive amount of funds from the banking sector, bankers said.
As Hasina鈥檚 private industry and investment adviser, Salman wielded unchecked power over the financial sector, even as his actions crippled banks and drained public funds, they said.
Investigations into previous financial scandals, including the 1996 and 2010-11 stock market scams, implicated Salman and Beximco entities, but failed to hold Salman accountable, they observed.
Bangladesh Bank data showed that 57.84 per cent of Beximco鈥檚 total loans was taken using its textile and apparel division, with a significant portion of the loans is now unrecoverable, according to the BB report.
The division alone took Tk聽28,386 crore in loans, with Tk聽21,564 crore now defaulted, it said.
Of the 31 companies in this division, 15 entities, which are now defunct, acquired Tk聽11,923 crore in loans with almost the entire amount now classified as defaulted, it said.
The rest 16, which are operational, have total loans of Tk聽16,463 crore with Tk聽10,471 crore becoming defaulted.
In 2016, a Bangladesh Bank scheme allowed defaulters to reschedule loans for 10 years with a minimal 2 per cent down payment, allegedly benefiting Salman鈥檚 interests, bankers said.
This was further relaxed in 2022, extending repayment terms to 29 years and in that year alone, a record Tk聽63,720 crore in loans was rescheduled, up from Tk聽26,810 crore in 2021, they said.
On January 7, the Bangladesh Financial Intelligence Unit formed 11 joint investigation teams tasked with probing allegations of illegal wealth accumulation, tax evasion and money laundering by 10 large business groups, including Beximco Group, and Hasina and her family members.
The probe team also includes representatives from the Anti-Corruption Commission, the Criminal Investigation Department of the Bangladesh Police and the National Board of Revenue.
Stock market investments worth Tk聽6,800 crore linked to Salman F Rahman have been frozen, as beneficiary owners accounts connected to Salman, his son Ahmed Shayan Fazlur Rahman, 74 associates and eight proxy companies have been frozen.
On October 1, 2024, the Bangladesh Securities and Exchange Commission imposed a fine of Tk聽428.52 crore on nine individuals and companies for manipulating the prices of shares of Salman鈥檚 Beximco Ltd.
The business group鈥檚 entity, Yellow Apparels Limited, defaulted on Tk聽967 crore at Janata Bank and its another entity, Independent Television, defaulted on Tk聽319 crore at National Bank.
Zahid Hussain, former lead economist of the World Bank鈥檚 Dhaka office, told 抖阴精品 that Salman鈥檚 Beximco Group secured such a massive volume of loans by leveraging political influence and evading regulations.
鈥楽alman had entrenched himself in every sector; wherever there was money, he was there,鈥� Zahid said.
He suspected that the ousted prime minister Sheikh Hasina was aware of Salman鈥檚 activities, raising question whether she was personally benefited from them.
Zahid emphasised that a thorough investigation is needed to hold accountable all board members, senior management, and Bangladesh Bank officials involved in enabling these malpractices.
He urged the government to recover Salman鈥檚 unpaid loans by seizing both his domestic and foreign assets.
He also stressed that the interim government that took office after the ouster of Awami League regime on August 5 amid a mass uprising must implement measures to prevent powerful individuals from abusing their influence and engaging in criminal activities with impunity.
On August 22, 2024, the Anti-Corruption Commission initiated an inquiry into Salman following allegations of corruption, embezzlement and irregularities in the banking sector.
Salman was arrested on August 13 while attempting to flee the capital and he is currently in prison.
No Beximco officials could be reached for comment on these allegations despite several attempts over phone.
State-run banks gave Tk 27,563 crore to Beximco entities despite glaring irregularities. These banks hid information and gave false information to the central bank to continue such irregularities and offering loans to the business group, the BB inspection report said.
Of this, Janata Bank鈥檚 exposure alone accounted for nearly half of the loans by the state-run banks, including Sonali Bank, and the other institutions.
Under Salman鈥檚 influence, Janata Bank flouted regulations, disbursing loans without proper due diligence. Loans were issued merely on verbal requests, often before any documentation was completed. Despite exceeding the single-borrower exposure limit, the bank continued granting loans, exposing its financial stability to significant risks.
Beximco also secured loans through fraudulent practices, such as borrowing under one company鈥檚 name while diverting funds to another.
Although his massive loan withdrawal and his unwanted influence crippled the financial sector, no actions were taken against him or his companies by the AL-led government.
Beximco Limited and GMG Airlines Limited, two entities of Beximco Group, have defaulted on loans amounting to Tk聽1,544 crore with Sonali Bank.
Beximco Pharmaceuticals Limited has 10 directors and at least one of whom found as a common director of 60 other companies within Beximco Group, which acquired Tk聽8,645 crore in loans of which Tk聽4,328 crore is defaulted now.
鈥楾herefore, the board of directors of Beximco Pharmaceuticals has direct influence over these unpaid loans, where public money is at stake, and the company could be a beneficiary of these loans,鈥� the BB report said.
Bangladesh Bank executive director and spokesperson Husne Ara Shikha told 抖阴精品 that a number of investigations was going on to find out real picture of corruption and irregularities.
A task force is also working to bring back money laundered abroad, she said.
