The High Court on Wednesday directed the Bangladesh Bank and other relevant authorities to take legal action against individuals and institutions responsible for approving Tk聽53,000 crore in questionable loans to Beximco Group.
In its verdict, the bench of Justice Farah Mahbub and Justice Debasish Roy Chowdhury criticised the Bangladesh Bank, scheduled banks and financial institutions for sanctioning the loans in violation of banking regulations.
The court observed that their conduct was 鈥榟ighly questionable鈥�.
The High Court also withdrew its September 5, 2024 order which had instructed the Bangladesh Bank to appoint a receiver to oversee Beximco鈥檚 operations and attach its properties.
However, the court emphasised that Beximco Group must now operate strictly within the bounds of the law, under constant monitoring by the Bangladesh Bank and other regulatory bodies.
The decision was made in consideration of the interests of thousands of workers, staff and employees, the court stated.
The court further directed that the Bangladesh Bank to recover the defaulted and classified loans of Beximco in accordance with law.
Additionally, the court ordered the Bangladesh Financial Intelligence Unit and other relevant agencies to complete any ongoing investigations or inquiries into the matter.
If evidence of wrongdoing is found, authorities must take appropriate legal action.
The court acknowledged that the Bangladesh Bank鈥檚 appointment of a receiver for Beximco 鈥� except for Beximco Pharmaceuticals 鈥� was lawful under the doctrine of necessity, despite not being explicitly mandated under existing banking laws and regulations.
The actions taken by the receiver were also deemed lawful in greater public interests.
The court observed that the receiver appointment was deemed necessary due to the existing financial circumstances of Beximco Group, which had Tk 53,000 crore in outstanding loans, with Tk 23,120.51 crore classified as non-performing as of September 30, 2024.
The court strongly criticised the Bangladesh Bank and its affiliated banks and financial institutions for their failure to enforce loan repayment and prevent the build-up of defaulted loans.
The HC warned that the consequences of this failure would ultimately burden the public.
鈥楾he Bangladesh Bank and its scheduled banks and financial institutions have miserably failed to fulfil their statutory and legal obligations regarding loan disbursement and recovery,鈥� the court observed.
