Janata MD in the line of fire
A central bank probe body has recommended its higher-ups take punitive measure against Janata Bank Managing Director Md Abdus Salam Azad for his alleged involvement in the AnonTex Group loan scandal.
Between 2007 and 2014, the state-run bank disbursed a large amount of loans to 22 companies of AnonTex Group by breaching the banking rules and regulators -- and the probe body found direct involvement of Azad in the transgression.
The companies opened 20 accounts with the corporate branch and the rest with local office of the lender, according to an investigation carried out by the central bank inspection team.
“Azad served as a manager of the corporate branch for a good portion of the time during the mentioned years. And he gave scope to the concerns of AnnonTex Group to swindle the amount,” the probe report said.
He was the manager of the branch from November 2011 to August 2013.
As of September last year, the total outstanding loans of AnonTex Group stood at Tk 5,768.52 crore -- and a major of the sum has already turned defaults.
In many of the cases, the accounts of the group were opened hurriedly and the loans were disbursed to them just as quickly -- without following banking norms.
Azad was appointed MD of Janata Bank in December last year and he also rescheduled a good amount of default loans of the companies breaching the regulations by way of misusing his post, said a Bangladesh Bank official requesting anonymity as he is not authorized to speak with the media.
The current MD of the state-run lender rescheduled the loans to conceal the irregularities that had transpired while he was the manager of the corporate branch.
The probe body has already submitted its recommendations to the central bank higher-ups to take further action to this end.
The central bank is now mulling over the type of action it could take against Azad.
As per the Banking Companies Act 1991, Azad may be removed from the post of MD -- given the gravity of the financial crime.
The BB, however, will have to take prior approval from the finance ministry to remove MD of a state-run bank as per the law.
The central bank earlier removed Abdul Hamid and Kazi Fakhrul Islam from the post of MD of Agrani and BASIC respectively after it found their involvement in loan scams.
The latest central bank investigation also found that AnonTex Group took the fund by showing 15 projects. Nine of the projects are yet to be set up.
The companies published false tender notices to set up the projects and laundered money abroad in the name of import of capital machineries.
According to the credit proposal of the companies, the group kept 56 acres land of worth Tk 677 crore.
Besides, the bank fixed a collateral security of Tk 4,935 crore given the worth of machineries and infrastructure of the companies.
“But the boundary of the land is not clearly indicated as per the documents submitted by the companies. So, it will be highly difficult for banks to sell the properties,” the report said.
After revealing the sensational financial scam by the central bank in 2018, Azad had acknowledged to The Daily Star that some of the loans to AnonTex were sanctioned during his tenure as the GM and deputy GM of the corporate branch.
He claimed then that adequate collateral had been kept by the bank against the disbursed loan.
This time, Azad did not respond to The Daily Star’s request for comment. At the time of writing, he neither answered his phone nor replied to text messages from the correspondent.
