Bank-Insurance
How Salman makes billions with free bank money
Companies associated with Salman F Rahman, former private sector adviser to former prime minister Sheikh Hasina and vice-chairman of Beximco Group, owe around Tk36,865 crore to seven banks in the country, including four public and three private banks, according to documents obtained by the news media.
The banks involved are Janata Bank, Sonali Bank, Rupali Bank, Agrani Bank, National Bank, IFIC Bank, and AB Bank.
Salman, who was arrested on Tuesday night in the Sadarghat area of the capital during an alleged escape attempt, abused some state-owned banks turning them into weak banks, the documents reveal.
As per the documents, companies reportedly linked to Salman F Rahman owe Tk23,070 crore to Janata Bank, Tk1,838 crore to Sonali Bank, Tk965 crore to Rupali Bank, Tk1,409 crore to Agrani Bank, Tk2,952 crore to National Bank, Tk6,031 crore to IFIC Bank, and Tk605 crore to AB Bank.
However, according to a report by Bangladesh Bank, the loans owed by companies associated with Salman F Rahman to IFIC Bank alone total around Tk11,000 crore.
Most of these loans have been kept unclassified through multiple reschedulings, despite being overdue for classification, according to a senior official of the Bangladesh Bank.
Janata Bank
The state-owned Janata Bank has not provided financing for the past year, as Beximco Group alone utilised the entire lending capacity of the bank by taking loans totaling around Tk23,070 crore as of 14 August, exceeding the single borrower exposure limit.
Beximco Group continued debt servicing with Janata Bank by securing fresh loans through the creation of new companies, which accumulated a massive amount of debt and restricted the bank’s business to a single borrower.
The conglomerate secured loans against at least 28 companies from the bank’s local office branch, according to documents obtained by the news media.
This is how Beximco paralysed the business operation of Janata bank putting it into huge loss exposing depositors’ money worth Tk1.10 lakh crore as of December last year.
Janata bank showed net profit of Tk55 crore at the end of December 2023 taking forbearance for maintaining required provision against default loans. If the bank would maintain provision, it would be in loss of more than Tk1,000 crore, according to the bank sources.
The provision shortfall of the bank was Tk2,700 crore as of December last year, central bank data shows.
Janata bank continued to finance Beximco owned companies even after exceeding single borrower exposure limit through taking special permission from the central bank.
When addressing the annual general meeting for 2023 held in June this year, Janata Bank chairman Prof Dr SM Mahfuzur Rahman said that some banks, including Janata, have lost their capability to disburse fresh loans as laid-out loans are not coming back to the lenders.
Instead of disbursing any fresh loan, they would rather concentrate on recovering defaulted loans, said Dr Rahman.
The Beximco Group also has overdue loans of $56 million as of 14 August from the Export Development Fund (EDF) in foreign currency provided by Janata Bank.
The Bangladesh Bank suspended EDF financing with Janata Bank a year ago due to the overdue loans from Beximco Group.
EDF loans are sourced from the foreign exchange reserve and are offered to exporters at a very low rate of 3% to 4%.
These loans are intended to facilitate exports, but the overdue EDF loans indicate that Beximco used reserve currency at a low rate without repatriating the export proceeds, leading to overdue payments.
Additionally, Janata Bank has been blacklisted by many foreign lenders due to non-payment issues related to imports by the Beximco Group.
The News Media has obtained numerous complaints filed with the Indian Commission in Dhaka by Indian exporters against Beximco Group for non-payment.
Despite these issues, Janata Bank did not take any action against Beximco Group and continued to provide financing until Salman F Rahman was arrested following the downfall of the Hasina government.
IFIC Bank
A senior official from the central bank told the news media that about ten of IFIC Bank’s top 30 largest borrowing companies are owned by Salman F Rahman, who is also the bank’s chairman.
Among IFIC Bank’s top borrowers are Sreepur Township, which has loans amounting to Tk1,020 crore, Sunstar Business with Tk615 crore, Fareast Business with Tk614 crore, Cosmos Commodities Limited with Tk612 crore, Uttara Jute Fibers with Tk552 crore, Absolute
Construction & Engineering Ltd with Tk463 crore, Apollo Trade International Ltd with Tk455 crore, Altron Trading Ltd with Tk449 crore, and Northstone Construction & Engineering Ltd with Tk421 crore.
All these companies are associated with Salman F Rahman, according to a Bangladesh Bank official who spoke on condition of anonymity.
Additionally, Tk426 crore was borrowed under the name of Assad Trading & Engineering Ltd, and over Tk400 crore was borrowed by Serve Construction from IFIC Bank, both of which are also linked to Salman.
A member of the central bank’s inspection team told the news media that, despite the different names of managing directors and chairpersons, the loans were actually taken out by Salman F Rahman. The eleven institutions mentioned collectively owe Tk6,000 crore.
A central bank director noted that IFIC Bank also holds several smaller loans linked to Salman F Rahman. These companies have secured approximately Tk150 crore to Tk200 crore in loans from the bank within 6 months to a year of their establishment.
He said, “These companies are located in Dhanmondi, Gulshan, Badda, and Rampura areas. But on the ground, these companies are not functioning properly.”
According to a report from Bangladesh Bank, IFIC Bank’s total loans at the end of December 2023 amounted to Tk41,248 crore. Of this, Tk2,589 crore, or 6.28%, were classified as defaulted loans.
A detailed inspection by the central bank revealed that IFIC Bank’s total non-performing loans were approximately Tk8,000 crore, or 24%.
The inspection also found that around Tk11,000 crore of the bank’s loans were associated with Salman F Rahman.
National Bank
Bloom Success International Limited, a company associated with Salman F Rahman, has loans amounting to Tk836 crore from National Bank. Moreover, Salman’s Beximco Group owes Tk823 crore, and Beximco LPG Unit 1-2 has Tk1,293 crore in loans from National Bank.
Agrani Bank
Beximco Ltd holds loans of Tk663 crore, Beximco Pharmaceuticals Ltd owes Tk375 crore, and Beximco Communication Ltd has Tk371 crore in loans from Agrani Bank.
AB Bank
Beximco Group has loans amounting to Tk600 crore taken from AB Bank.
How IFIC bank was abused
Salman F Rahman has held the chairmanship of IFIC Bank for 14 years since 2010, despite owning only 2% of the shares. His son serves as vice chairman with a 2% stake, while the government owns 32.75% of the shares and the general public holds 61%.
Under his chairmanship, he allegedly abused the bank’s resources through financial engineering.
For example, last year IFIC Bank issued “IFIC Aamar Bond” worth Tk1,000 crore for Sreepur Township Ltd (STL), a newly-formed real estate company in partnership with Beximco Group.
IFIC Bank guaranteed the Aamar Bond, meaning the full liability of Tk1,000 crore fell on the bank, which eventually eroded its capital and put depositors’ funds at risk.
The Bangladesh Securities and Exchange Commission (BSEC) approved this large bond issue for a new project without evaluating the financial capacity for interest payments.
If the STL project fails, IFIC Bank will be responsible for repaying the investors, despite having no direct involvement with the project.
The guarantee also presents a conflict of interest, as Salman F Rahman has stakes in both IFIC Bank and STL.
When the bank was raising funds for the chairman’s personal business and spending public money to promote bonds for STL, this was completely overlooked by the central bank.
IFIC Bank provided a guarantee for a high-interest-bearing bond at 12%, even though STL was established only in March that year and lacked experience in constructing flats or developing plots, let alone building a township.
Despite this apparent corruption, no regulator has dared to raise questions. Later, in March of this year, just before his term ended, BSEC Chairman Shibli Rubayat Ul Islam allowed Beximco to raise Tk2,600 crore through issuing bonds to invest in STL.
As a result, Salman was able to raise a total of Tk3,600 crore for his new real estate company, putting investors at risk of not receiving their returns.
Bangladesh Bank (BB) has received a loan proposal totaling $2.5 billion from the World Bank (WB) and the Asian Development Bank (ADB) in several packages, aimed at supporting structural reforms, policy implementation, and investment projects.
The proposal was presented today during a meeting between Bangladesh Bank Governor Ahsan H Mansur, senior officials, and delegations from both the WB and ADB at the BB headquarters. The information was confirmed by BB spokesperson and Executive Director Husne Ara Shikha.
“The World Bank has proposed a $1 billion loan, which includes a $750 million policy-based loan requiring the central bank to implement specific policies. Additionally, a $250 million investment loan is currently in process,” said the BB spokesperson.
Similarly, the ADB has proposed a $1.5 billion policy-based loan, which will be disbursed in three phases, including a $200 million investment loan. According to the central bank spokesperson, $500 million of the loan could be received by 2025.
Additionally, a visiting US delegation, led by Brent Nieman, Assistant Secretary of the US Treasury Department, met with the central bank governor today. During the meeting, the delegation was briefed on the country’s macroeconomic conditions, though no specific loan amount was discussed by the US treasury team.
Parvez Tamal, Chairman of NRBC Bank, once known as a close ally of former Prime Minister Sheikh Hasina, has reportedly shifted his stance following the resignation of the Awami government on August 5. Tamal, who had been accused of exploiting political power for financial misdeeds during the Awami regime, is now aligning himself with student activists in a bid to protect his position.
Previously, Tamal had threatened NRBC Bank employees with termination if they supported or joined the quota reform movement. He also warned of administrative harassment for any Facebook posts or comments related to the movement. However, after the fall of the Awami government, Tamal has been providing financial support to the very student protesters he once opposed, in an attempt to distance himself from his controversial past.
An investigation by Orthosongbad revealed that during the anti-quota movement, Tamal worked on behalf of Sheikh Hasina, even monitoring NRBC Bank staff to ensure they did not participate in the protests. On July 17, under his directive, a warning was sent to all branch managers of the bank, cautioning them about the movement. Documents related to this have surfaced during the investigation.
A directive from NRBC Bank instructed all its officers and employees to refrain from joining any assembly related to the quota reform movement or sharing any comments, posts, or information about it on social media. The email from the bank’s HR department, titled ‘C,’ warned that any violation of this order would result in administrative action in accordance with HR policies. The directive also emphasized ensuring maximum security in and around the bank and required employees to be punctual in reporting to work.
Sources suggest that NRBC Bank Chairman Parvez Tamal, in an attempt to secure his position, has been trying to win over the coordinators of the anti-discrimination student movement. This speculation gained traction after a recent event where Tamal handed over a cheque for 5 million BDT from the bank’s Corporate Social Responsibility (CSR) fund to Hasanat Abdullah, one of the coordinators of the student protests. The donation, aimed at providing treatment and rehabilitation for injured protesters, has sparked widespread criticism on social media. Many are questioning Tamal’s sudden shift, given his previous ties to former Prime Minister Sheikh Hasina and his outspoken opposition to the student movement.
At the donation event, Parvez Tamal remarked that NRBC Bank would support the dreams of those building a “new Bangladesh.” In addition to providing medical assistance to the injured, he pledged future employment opportunities and scholarships for injured students. NRBC Bank also committed to offering jobs to able-bodied members of families affected by the protests. These promises mark a stark contrast to Tamal’s previous stance, where he had vocally supported Sheikh Hasina and opposed the student protests.
Attempts to reach Hasanat Abdullah, one of the coordinators of the anti-discrimination student movement, for a comment were unsuccessful. Despite multiple calls from Orthosongbad office to his mobile phone, there was no response. Similarly, efforts to contact another coordinator, Sarjis Alam, also failed to yield any comments.
However, former law student of Dhaka University and social media figure Syed Abdullah shared his thoughts on Facebook, stating that NRBC Bank Chairman Parvez Tamal is on a mission to secure his position by ingratiating himself with the students, thereby improving his image. Abdullah urged immediate investigations by the Anti-Corruption Commission (ACC) and journalists into the activities of Tamal and his associates.
Orthosongbad made several attempts to contact NRBC Bank Chairman Parvez Tamal for comments, but no response was received.
Sources claim that Parvez Tamal, in his efforts to support the Hasina government, has distributed various donations through the bank, both publicly and covertly. Among these are scholarships in the name of Bangabandhu, a special issue of “Planet” magazine focused on Sheikh Mujibur Rahman’s life and legacy, donations to the Bangabandhu Memorial Trust, contributions to the Bangabandhu Youth Fair, and charity books and iftar events around Bangabandhu’s birthday. Additionally, the bank had provided significant funds for Sheikh Hasina’s Ashrayan Project.
Parvez Tamal, who claims to be a Russian oligarch and served as the president of the Russia Bangabandhu Parishad, has been implicated in various financial irregularities, including loan fraud, commission schemes, recruitment corruption, stock manipulation, money laundering, and the embezzlement of funds. During the tenure of former Prime Minister Sheikh Hasina, Tamal reportedly leveraged his connections with senior leaders of the Awami League to engage in these activities.
The Anti-Corruption Commission (ACC) had previously launched an investigation into Parvez Tamal, chairman of NRBC Bank, following allegations of irregular salary increases for select officials. The investigation stemmed from a complaint by a sponsor shareholder of the bank. Tamal reportedly bypassed the banking regulations, awarding significant salary increments to 27 officials while ignoring over 3,800 employees. Additionally, Tamal and his personal secretary, Asif Iqbal, allegedly pocketed excessive fees from board meetings, violating the country’s banking laws. Furthermore, the investigation revealed that Tamal had set up an unauthorized entity, NRBC Management, without approval from Bangladesh Bank. However, the investigation was abruptly halted, allegedly due to Tamal’s political influence.
In a separate case filed on July 11, 2023, the ACC accused 14 individuals, including 11 NRBC Bank officials, of money laundering and providing unlawful loans. The lawsuit alleges that the accused embezzled approximately 78 crore BDT (including interest) by issuing loans without proper collateral. Additionally, 5.97 crore BDT worth of export proceeds were reportedly laundered without being repatriated to Bangladesh. Tamal was implicated in this fraudulent activity but reportedly used his political connections to suppress the investigation.
Further details of this ongoing investigation will be disclosed in subsequent reports by Orthosongbad.
A total of 22 companies received awards in 13 categories for best presented annual reports, integrated reporting, and corporate governance at the 24th ICAB National Awards. The event, organized by the Institute of Chartered Accountants of Bangladesh (ICAB), took place on Tuesday, September 10, at the Sonargaon Hotel in Dhaka.
Dr. Saleh Uddin Ahmed, Adviser to the Ministry of Finance, Ministry of Commerce, and Ministry of Science and Technology, attended the event as the chief guest and handed over the awards to the winners. Special guests included Dr. Md. Khairuzzaman Mozumder, Secretary of the Ministry of Finance, Md. Selim Uddin, Secretary of the Ministry of Commerce, and Md. Abdur Rahman Khan, Chairman of the National Board of Revenue.
ICAB President Mohammad Forkan Uddin delivered the welcome address, while Md. Humayun Kabir FCA, Chairman of ICAB’s Review Committee for Published Accounts and Reports (RCPAR), and Co-Chairman Md. Moniruzzaman spoke on the selection process for the best reports.
At this year’s competition, Bank Asia PLC was named the overall winner. A total of 22 companies were recognized for excellence in best presented annual reports, integrated reports, and corporate governance disclosures. Additionally, eight companies received ‘Merit’ awards.
A total of 76 companies submitted their financial reports for consideration in the competition. From the winners, three top reports in each category will be nominated for the South Asian Federation of Accountants (SAFA) competition, representing the SAARC region.
ICAB-BPA Award Winners:
Private Sector Banks:
- Gold: Bank Asia PLC and Shahjalal Islami Bank PLC (joint winners)
- Silver: The City Bank PLC
- Bronze: BRAC Bank PLC and United Commercial Bank PLC (joint winners)
Financial Services Sector:
- Gold: IPDC Finance Limited
- Bronze: IDLC Finance PLC
Manufacturing:
- Gold: British American Tobacco Bangladesh Company Limited
- Silver: Walton Hi-Tech Industries PLC
- Bronze: Reckitt Benckiser (Bangladesh) PLC
Power and Energy Sector:
- Silver: United Power Generation and Distribution Company Limited
Diversified Holdings:
- Bronze: Advanced Chemical Industries Limited (ACI Limited)
Insurance (General):
- Gold: Green Delta Insurance Company Limited
- Silver: Reliance Insurance Limited
- Bronze: City General Insurance Company Limited
Insurance (Life):
- Bronze: National Life Insurance Company Limited
NGO/NPO:
- Silver: Sajida Foundation
- Bronze: Shakti Foundation for Disadvantaged Women
Communication and Information Technology:
- Gold: Robi Axiata Limited
- Silver: Grameenphone Limited
- Bronze: Genex Infosys Limited
Service Sector:
Bronze: Unique Hotel & Resorts PLC
Corporate Governance Category:
- Gold: Bank Asia PLC
- Silver: Shahjalal Islami Bank PLC
- Bronze: BRAC Bank PLC
Integrated Reporting Category:
- Gold: Bank Asia PLC and Shahjalal Islami Bank PLC (joint winners)
- Silver: IDLC Finance PLC
- Bronze: BRAC Bank PLC
Notably, no awards were given this year in the Public Sector Banks, Infrastructure and Construction, or Agriculture sectors due to insufficient marks.
