Staff Reporter :
The Bangladesh Financial Intelligence Unit (BFIU) has asked the banks and financial institutes and stock market regulator to freeze the accounts of nine ex-directors of People’s Leasing and Financial Services (PLFS) and shares held by them for their alleged involvement in financial irregularities.
BFIU, an anti-money-laundering arm of Bangladesh Bank, wrote to the chief Executive Officers (CEOs) of all commercial banks and financial institutions and the Chairman of Bangladesh Securities and Exchange Commission (BSEC) asking them to comply with its instruction. Admitting the matter, BFUI chief Abu Hena Mohd Razee Hassan told The New Nation yesterday that they have given in line with a request from BB’s financial institutions department.
The High Court on Sunday gave the go-ahead to the BB to appoint a liquidator for PLFS, a non-bank financial institution (NBFI).
The Bench of Justice Muhammad Khurshid Alam Sarkar also ordered the Bangladesh Bank to freeze the accounts of those who were in PLFS’s Board until 2015.
BB last week formally announced to liquidate PLFS as the organization’s financial health deteriorated in the last several years.
Earlier, on June 27, the Finance Ministry instructed the central bank to shutter the NBFI for its failure to improve its conditions, in a first for Bangladesh’s financial sector.
Previously, two banks — Bank of Credit and Commerce International and Oriental — that were on their last legs were restructured but not liquidated.
Liquidation of PLFS means closing its operations permanently and the BB with court’s permission will take actions to settle liabilities by selling off its assets.
The NBFI has failed to repay the depositors’ money despite maturity of the funds, found a BB investigating. Default loans and net losses have recently escalated as well.
The problems of PLFS began in earnest in 2013-14, when some of its directors made off with more than Tk 1,000 crore by way of submitting fake documents, according to a central bank inspection report then.
In 2015, the central bank had removed five directors for their involvement in the financial scandal.
The Dhaka Stock Exchange on Sunday suspended trading of PLFS in line with the BB’s liquidation decision. As of May 31, retail investors held 68 percent of the NBFI’s stock and they stand to lose about Tk 193.52 crore — and institutional investors Tk 25.75 crore — if the liquidation goes through.
Some 15 banks and NBFIs have Tk 850 crore stuck in PLFS.
