Agrani loses Tk 6.80b on fake LCs sans security money

Dhaka,  Monday,   2016-09-20
Published : 20 Sep 2016, 23:53:52

Agrani loses Tk 6.80b on fake LCs sans security money

Tk 43.03b audit objections in civil aviation ministry
FE Report


The state-owned Agrani Bank suffered a loss of Tk 6.80 billion in two fiscal years due to its financial irregularities.

The parliamentary standing committee on public accounts found this in 24 audit objections Tuesday, made in a special report of the Comptroller and Auditor General of Bangladesh (CAG) for the FYs 2009-10 and 2010-2011.

The loss occurred as high officials of the bank had given opportunity to various unscrupulous traders to open fake letters of credit (LCs) without taking any security money.

The parliamentary body unearthed these irregularities during the 55th meeting of the committee at the parliament secretariat with committee chairman Mohiuddin Khan Alamgir in the chair.

The committee recommended the Banking and Financial Division to immediately settle the audit objections.

Besides, the committee recommended identifying the officials involved in the crime, taking legal actions against the sacked officials, vacating writ petition and taking necessary steps so that the fraud companies cannot open LCs in other banks using different names.

The standing committee asked the authority concerned to take help of the CIB of Bangladesh Bank (BB) for implementing its recommendations and submit a report within next 15 days to the committee.

From the working paper, it was found that during the two fiscal years, Agrani Bank gave various individuals and organisations the opportunity to open fake LCs without any security money. Of those, one M/S Iliyas Brothers (Pvt) Ltd had opened cash LC to import crude edible oil without any security money which led to a loss of the bank to the tune of Tk 2.25 billion.

The government incurred a loss of Tk 1.51 billion as Agrani Bank authority failed to realise the liabilities from another trader M/S Rahman Haque.

Another Tk 601 million was lost as the bank frequently rescheduled and failed to cover the cost of fund and waive interest on various companies. The companies paid only Tk 261 million in 18 instalments.

The government incurred a loss of Tk 4.81 million as the bank violated its rules in rescheduling and gave project and CC hypo loan which the borrowers could not pay back.

The government incurred a loss of Tk 201 million as it failed to realise the default loan from M/S S K Jute Mills. Over Tk 172 million was lost due to the bank's failure to realise the loan.

An amount of Tk 144 million was lost as the bank failed to realise CC pledge, demand and hypo loans from M/S Mahi Fish Processing Ltd. Over Tk 135 million was lost due to failure to realise the default loan.

Over Tk 134 million was lost due to failure to realise default loan from M/S Onetel Communication Ltd.

In another meeting of the parliamentary body on public undertaking, a total of 707 unresolved audit objections of the civil aviation and tourism ministry and its various departments including Biman Bangladesh Airlines were discussed.

The audit objections were raised by the CAG from 1972 until 2015 involving over Tk 43.03 billion.

The committee recommended the ministry and other its departments to do their duty properly and correct all their bad reputation.

The committee made its suggestions at the 27th meeting at the parliament building. Committee chairman Showkat Ali chaired the meeting.

Committee chairman Showkat Ali told the reporters after the meeting that the committee has seriously highlighted the issues asking them why it took so long to settle these objections.

The civil aviation and ministry authority said there are many audit objections which were raised without any reason, he said. "We have asked them to hold bilateral and tripartite meetings and settle all those as soon as possible," he added.

Mr Ali said the ministry and other authorities have requested the committee to continue the pressure and to help improve their management.

"We have told them to do their duty properly," he said.

Regarding the committee's observations as a public institution, the committee chairman noted it is visible that the performance of Biman and various airports under the ministry including Hazrat Shahjalal International Airport (HSIA) is not satisfactory.

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