Hallmark Group alone took Tk 15b loan from SB: ACC Its MD admits breaching rules before JS body

The Financial Express, 3 October 2012

Chairman of Anti Corruption Commission (ACC) Ghulam Rahman Tuesday said the Hallmark Group alone took Tk 15 billion controversial loan from Ruposhi Bangla branch of Sonali Bank.

Citing investigation, he said the rest amount was taken from other 26 commercial banks in the form of back to back LCs (Letter of Credits) and inland bill purchase (IBP).

“Our inquiry team investigates only the loan amount (the amount that was taken by the Hallmark Group from the branch in cash),” he told the reporters at his office in the afternoon.

He said their investigation on loan amount has already been completed but the inquiry team is yet to submit its findings to the commission.

The ACC Chairman, however, stressed on the importance of interrogating officials of the commercial banks that are linked with the massive financial irregularities in the country’s banking system.

The Hallmark Group took the amount from 61 branches of the banks, mostly private ones, as informed by a key officer of the anti graft body.

Responding to a question, Mr Ghulam Rahman said the commission will analyse the findings of investigators immediately after receiving it.

“We must satisfy ourselves before we go for filing case. We’ve to identify what happened and who were the culprits behind the embezzlement,” he said.

Chief of the anti graft watchdog said the commission needs a report having enough evidence before filing cases.

About Destiny Group, he said the law enforcement agencies can arrest the accused Destiny officials at anytime on charges of siphoning off Tk over 32 billions.

“So far I know, the accused officials are yet to surrender to the law enforcers and they are fugitives,” he added.

The multilevel company allegedly transferred billions of taka to their personal accounts from the company accounts.

Meanwhile, the 6-member inquiry team led by ACC deputy director Joynal Abedin Shebly submitted the partial investigation report to the commission in the afternoon seeking its permission to file cases against 27 people in connection with the loan forgery.

The accused persons in the report include 21 Sonali bank officials and 6 Hallmark men for their alleged involvement in the financial irregularities.

Meanwhile, bdnews24.com adds: Hallmark Group Managing Director (MD) Tanvir Mahmud admitted Tuesday to taking loans from the Sonali Bank (SB) breaching rules, a parliamentary watchdog said.

A Parliamentary Sub-Committee on the Ministry of Finance interrogated Tanvir and General Manager Tusher Ahmed for around two hours.

After the interrogation, panel convenor Tajul Islam told reporters at the Parliament premises: “We’ve found specific irregularities in the process of taking Sonali Bank loan. Apart from these, we’ve also found evidence of several irregularities. Even the Hallmark Managing Director admitted to the irregularities in the Group’s taking loan from Sonali Bank.”

The Sub-Committee, formed to investigate the Tk 36 billion loan scam, asked for some documents from Tanvir, Tajul said. “He has submitted some of the papers. He’ll submit the others within Thursday,” he said.

“After comparing his statement with the records, we’ve nearly agreed that he took the loan through irregularities,” he added.

Asked when the report will be submitted, Tajul said “as soon as possible”.

The Sonali Bank directors will appear before the panel today (Wednesday) following summons, he added.

The Parliamentary Sub-Committee chief also said those linked to the scam will be identified after the final report is made.

A six-strong Anti-Corruption Commission (ACC) team, led by Deputy Director Mir Zainal Abedin Shibli, is also investigating the scam.

Asked whether the Parliamentary Sub-Committee will summon the Advisor to the Prime Minister Syed Modasser Ali, its chief Tajul said, “We’ll summon those who we think it is necessary to interrogate.”

WB teams’ visit to BD deferred due to delay in forming expert panels

The financial Express, 3 October 2012

The delay to form the expert panels by the World Bank (WB) for supervising the probe into the alleged Padma Bridge corruption is responsible for rescheduling the visit of its teams to Bangladesh, a government official said in Dhaka Tuesday.

Since the Bank is yet to nominate the experts for its proposed panel for supervising the investigation by the government of Bangladesh into the alleged corruption, the visit of the WB teams has been delayed, said Economic Relations Division (ERD)’s senior secretary Iqbal Mahmood.

The delegations of the Washington-based lender will arrive in Dhaka within the current month, the secretary confirmed this.

Earlier, the World Bank country director Ellen Goldstein met Iqbal Mahmood Monday morning and informed him about the delay in visit of their teams.

The WB announced Sunday the postponement of the visit of its delegations without assigning any reasons. Until Monday, both the World Bank Dhaka office and the government officials could not say exactly what had caused the cancellation of the visit in accordance with an earlier schedule.

The WB chief in Dhaka Ms Goldstein in a statement said they would send two teams within this month from its headquarters to assess credibility of investigation into the alleged Padma Bridge corruption and to prepare modalities relating to procurement.

A senior ERD official said Ms Goldstein met the ERD secretary Tuesday after returning from the WB’s headquarters in Washington and discussed the Bank’s update on the Padma Bridge.

He said: “The World Bank has so far failed to nominate the members of the proposed expert teams. It will be formed with international anti-corruption experts.”

The expert panel will supervise the investigation by the Anti-Corruption Commission (ACC) into the alleged Padma Bridge graft. The WB stated it has provided credible evidence of the graft to the government of Bangladesh.

If the proposed WB expert panel is satisfied with the credibility of the investigation by the ACC, then it will revisit its earlier decision about cancellation of its US$1.20 billion funding support to the Padma Bridge project, opening the way for its financing as one of the co-financiers, the official told the FE.

In a statement Monday, Ms Goldstein said one of its missions would introduce an external panel of eminent anti-corruption experts to begin assessing the fullness and fairness of the Bangladesh government’s investigation into evidence of corruption under the Padma Bridge project.

In conjunction with this assessment, the second mission will collaborate with other co-financiers in modifying the project implementation arrangements to ensure greater oversight of procurement processes, she added.

The WB’s two teams will work jointly with other co-financers — Asian Development Bank (ADB), Japan International Cooperation Agency (JICA) and Islamic Development Bank (IDB) — of the US$2.9 billion Padma Bridge project when they arrive in Dhaka by this month.

BHTPA, KL developer meet today to discuss building high-tech park

The Financial Express, 3 October, 2012

In a dramatic development, Bangladesh Hi-Tech Park Authority (BHTPA) will meet with a Malaysian developer today (Wednesday) in Dhaka to discuss setting up the country’s first-ever infrastructure of such type.

One of the thrust projects of the government has faced an impasse following a decision taken by the authority (BHTPA) in relation to splitting the park area into three blocks. The decision sparked a row between the BHTPA and the Malaysian developer.

The BHTPA authority wanted to award the 235 acres of land area at Kaliakoir in Ghazipur to more than one developer by ‘violating RfP (request for proposal) conditions’.

Sources who are familiar with the project told the FE Tuesday that a ‘dramatic development’ occurred as the Prime Minister intervened in it.

The Prime Minister recently instructed the authorities concerned to award the work to the best bidder instead of ‘re-blocking’ the park area.

Re-blocking means that the project will be split into three parts and it has to be awarded to more than one developer.

BHTPA issued a letter on September 30 signed by its director Dr Mohammed Ameen to the Malaysian developer to finalise the negotiation that was delayed by at least three months following the row.

Annuar Bin Mohd Saffar, vice president of Kulim Technology Park Corporation (KTPC), Mohamad Suhaimi Bin Mohamad Tahir, a project director of KTPC will lead the Malaysian side.

The meeting will take place at BHTPA conference room at 11:00 in the morning at Agargaon in the city.

BHTPA managing director Md Azizur Rahman and its high officials will lead today’s (Wednesday) meeting, sources said.

The BHTPA earlier moved to set up the hi-tech park in a bid to add information and communication technology (ICT) and other value-added products to the country’s export basket.

Soon after the evaluation of proposals, the BHTPA changed its decision and wanted to split the project into three parts and award the jobs to more than one bidder.

The KTPC, invited by BHTPA to negotiate the split jobs, protested the move saying the authority did not mention anything about it earlier in the tender documents.

It alleged that the authority wanted to share the development work with an Indian company that lacks experience in implementing such types of work.

However, KTPC officials told the FE that the impasse has started to fade away adding: “We’re expecting a positive outcome from today’s meeting.”

If awarded the job, KTPC along with local companies — SPL-IOE-KHL — will build basic infrastructures of the hi-tech park.

This infrastructure is believed to be creating a congenial atmosphere for establishing industrial units in the ICT, engineering, electronics, telecommunication, biotechnology and some other sectors.

The BHTPA will provide land to the KTPC for infrastructure development and attracting renowned foreign IT and electronics manufacturers to set up their units in the park.

The proposed hi-tech park will provide land to both domestic and foreign investors, so that they can use it for commercial and industrial purposes and set up electronic, mechanical and other allied factories.

Sources at the Kulim Technology Park Corporation, which has built a big hi-tech project in Malaysia, said it would be able to invest more than 1.0 billion US dollars in the park.

It said the world’s leading IT firms Microsoft and Intel are likely to set up their units in the park.

Entry to the export market of high technology for Bangladesh is very much restrictive on many counts, lack of hi-tech parks being one of them, said an IT expert.

If the project is implemented, the country’s export basket will diversify and boost it export earnings, he added.

Getting IRD off NBR’s hook

The Financial Express, 3 October, 2012

It is a widely accepted norm that a minister holding the portfolio of ministry would play a decisive role in determining the role that divisions and other agencies under his control would play. If the issues are of national import the minister concerned would refer those, along with his/ her observations and recommendations, to the highest level of the government for a final decision. Top officials of any unit under a ministry, if advised so, may make their suggestions on such issues but they are not supposed to get involved in any move to undo the minister’s decision or stance on policy or other matters.

But the situation in the Ministry of Finance, it seems, is otherwise. The incumbent National Board of Revenue (NBR) chairman and tax officials, according to a report published in the Financial Express last Monday, have been vehemently opposing a proposal mooted by the ministry to separate the Internal Resource Division (IRD) from the NBR. The International Monetary Fund (IMF) also favours such a separation.

Finance Minister AMA Muhith has, reportedly, asked the Finance Division to initiate moves for separation of the IRD from the NBR that is engaged in the internal revenue generation-related policy formulation. The NBR’s main job is the enforcement of tax-related policies of the government. The finance minister argues that any agency should not have the authority to formulate policies and implement the same. Under the existing system, the IRD secretary also acts as the chairman of the NBR that prepares tax policies and executes the same.

The finance minister has also asked the Finance Division to seek opinions and policy notes from stakeholders concerned on the separation issue soon.

It is, however, difficult to predict the fate of the finance minister’s initiative. A former IRD secretary in the year 2007-08 tried to separate the IRD from the NBR, but he had to retreat in the face of opposition from a section of high officials of the Board.

But why should be the taxmen so interested to carry out dual responsibility? Their reply could be that since they know ground realities as far as tax revenue mobilization better than others, tax-related policy formulation should be their responsibility.

But there are a few flip sides of the dual responsibility. The taxmen as policy planners would do what suits them best. They would try to avoid policy measures that impose extra load on them or make them accountable for lapses on their part.

The internal directive on separation, issued by the finance minister, highlights the minister’s annoyance with the ‘top’ management of the NBR. However, speculations about a soured relationship between the finance minister and the incumbent NBR chairman have been doing the rounds in the corridors of power for quite some time. The NBR chairman, reportedly, enjoys the blessing and support from someone powerful in the Prime Minister’s Office (PMO). However, of late the powerful individual himself is in lots of troubles and has been sidelined under pressure from outside sources.

The finance minister’s move to separate the IRD from the NBR, under the prevailing circumstances, may have a smooth sailing. But in the event of the separation, the issue that would come to the fore is the capacity of the IRD to formulate tax-related policies.

The division is headed by a secretary, who is also NBR chairman, has a joint secretary, deputy secretary, three senior assistant secretaries or assistant secretaries and one research officer. These officers are taken from different cadre services and they are barely familiar with intricacies of taxation laws and rules.

If the IRD is eventually separated from the NBR, the finance ministry will have to thoroughly reorganize the division by inducting people with adequate knowledge in taxation laws and rules into its different levels. It will also be required to upgrade and strengthen its research section hiring top-grade experts from the private sector on contractual basis.

There is no denying that country’s taxation policies have enough of loopholes that need to be plugged. The NBR, the performance of which in terms of revenue generation though has improved in recent years, being in-charge of policy making could never rise up to the expectation of the top policymakers of the government.

Now, it is to be seen whether the finance minister’s initiative to separate the IRD from the NBR gets the most essential nod from the highest authority of the government.