A volley of finger marks began between Mohiuddin Khan Alamgir, former interior minister and chairman of the Farmer Bank, which was renamed Padma Bank in 2019, and the current chairman of the lender, Chowdhury Nafeez Sarafat: both allege that the other embezzled funds from the troubled bank. money.

It all started on Sunday, when Alamgir, who is also the sponsor-shareholder of Padma Bank, urged the governor of the Bank of Bangladesh to investigate a Tk 100 crore investment by the lender in an alternative investment fund managed by Strategic Equity Management, which would be owned by Sarafat.

The fund was approved at a board meeting at which Alamgir was not present. The amount was released on November 1, 2015 and was never paid back in terms of dividend or return on investment, Alamgir said in the letter, of which Dhaka Tribune has a copy.

The investment was sanctioned in violation of the law which prohibited Sarafat from receiving any investment from Padma Bank since he was a director of the bank.

The amount appears to have been illegally sanctioned and invested or funneled, which constitutes blatant abuse or embezzlement of bank funds, according to the letter.

Therefore, Alamgir urged the central bank to investigate the case and identify the illegal users of the bank’s funds and organize its return to shareholders.

Meanwhile, on the same day, Padma Bank sent a letter to the Bangladesh Anti-Corruption Commission and Securities Commission alleging corruption and abuse of power by Alamgir.

Alamgir and former audit committee chairman Mahbubul Haque Chisty embezzled 8.33 crore of Tk by sanctioning loans to clients to buy City Medical College & Hospital, according to the letter signed by Md. Ehsan Khasru, general manager and CEO of Padma Bank.

Dhaka Tribune has a copy of the letter.

Alamgir and Chisty also received bribes from clients for granting loans and benefited financially, the letter said.

“Loan irregularities and abuse of authority for personal gain were pointed out in an inspection report from the Bangladesh Bank.”

Subsequently, the bank sought help from Alamgir in the recovery of defaulted loans in the amount of Tk 845.45 crore which were sanctioned in favor of 19 clients during his tenure, the bank added. letter.

But in vain, according to Khasru.

‘IT IS TO BLASK’

“Nafeez and his associates are responsible for the bank’s unfavorable situation,” Alamgir told Dhaka Tribune on Tuesday.

He then categorically denied the allegations of abuse of power.

The bank experienced a few problems during his tenure, but experienced serious problems after Sarafat took office.

Alamgir and Chisty had resigned from the board of directors of the former Farmers Bank in November 2017 by order of the central bank after corruption allegations against the two became deafening and depositors, including government agencies, began to withdraw money.

In January 2018, Sarafat was appointed president of the bank. But the bank’s fortunes have remained the same.

Founded in 2013, the bank has become a hotbed of financial irregularities in three years of activity. More than 3,500 Tk crore was siphoned from the bank during this period, thanks to Alamgir and Chisty, according to the BB.

In 2019, the bank was renamed Padma Bank for a facelift, but its murky past continues to haunt its present.

For example, at the end of 2020, its capital shortfall of Tk 309.99 crore was among the top ten in the banking industry. Its default rate is around 60 percent, compared to the industry average of 7.7 percent last year. Its loan / deposit ratio is 99.4%, while the regulatory ceiling is 87%.

“The central bank should appoint an administrator to save the bank and the depositors’ money,” Alamgir said.

He went on to say that the BB should not have allowed state banks to buy stakes in Padma Bank to save it; instead, they should have provided loans to resolve the bank’s temporary liquidity problems.

In 2018, public financial institutions Investment Corporation of Bangladesh, Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank bought 60% of the bank’s shares for Tk 715 crore, with a view to giving it new life.

But Sarafat also denies the charges against him.

“The bank was empty when I became president,” he told Dhaka Tribune on Sunday.

The government designed the ownership of the five public institutions to regain the trust of clients, he said.

Sarafat then denied any connection with Strategic Equity Investment.

However, over the past five years, Padma Bank has steadily secured over Tk 12 crore through the Tk 100 crore investment, he told Dhaka Tribune.