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Losses of struggling Bangladesh Industrial Finance Company keep mounting with the non-bank financial institution making no progress in recovering its non-performing loans, especially those from the largest defaulter, Major (retd) Abdul Mannan.
Former BIFC chairman Mannan is a member of parliament and the secretary general of Bikalpa Dhara Bangladesh, an ally of ruling Awami League.
As per the BIFC’s half-yearly financial report released on Monday, the company incurred Tk 38.05 crore in losses against the Tk 35.94 crore in losses in the same period last year.
BIFC has remained non-operational for months with depositors waiting hopelessly for getting back their money from the NBFI.
Like People’s Leasing and Financial Services, the company faces risk of liquidation because of a sorry state of its financial health, said Bangladesh Bank officials.
The financial situation of BIFC has worsened due mainly to non-payment of the Tk 639.65-crore outstanding loans received by Mannan.
The amount of loans Mannan received from BIFC accounted for around 76 per cent of Tk 841 crore distributed by the entity in loans, as per the BIFC’s annual report for the year 2018.
Officials of BIFC said that the poor state of loan recovery had resulted in closure of deposit collection and credit disbursement functions of the entity.
Of the entity’s total loans, around 98 per cent or Tk 816.3 crore has become defaulted, showed the BIFC’s annual report.
Besides, the NBFI has been failing to clear the depositors— money — around Tk 814 crore.
The BB, before suggesting the liquidation of People’s Leasing and Financial Services, had proposed that the finance ministry liquidate BIFC considering the poor financial state of BIFC.
Although the ministry allowed the central bank to go for PLFS liquidation, the ministry is yet to make any response to the liquidation proposal for BIFC.
Contacted, Mannan told New Age on Monday that the report published by BIFC was inappropriate and that was why it was yet to organise its annual general meeting for the year 2018 due to the shareholders’ appeal to court regarding inconsistencies in the company’s annual report.
‘I owe around Tk 192 crore to BIFC but the existing management led by the “outsider” board members fictitiously showed it Tk 639.65 crore in the financial statement by imposing high interest — as high as 700 per cent in some cases,’ he said.
‘I have already cleared around Tk 119.83 crore and have been engaged in discussion with the central bank for settling the rest of the disputed amount,’ said Mannan.
He mentioned the existing board members of the company as ‘vicious circle’ and ‘outsiders’.
BIFC’s shares, having face value of Tk 10 each, were traded at Tk 2.2 at the Dhaka Stock Exchange on Monday.
Meanwhile, the central bank, following a request from the Anti-Corruption Commission, has requested the Bangladesh Securities and Exchange Commission to impose a ban on Mannan and people connected with him from transferring shares of BIFC.
The BB letter said an investigation conducted by the ACC found that Mannan and 75 organisations, in which he had interest, had taken Tk 517.61 crore in loans from BIFC.
After the ACC investigation, Mannan accepted the liability of the loans and paid Tk 119.83 crore of the received loans, it said.
Although Mannan promised to return the rest Tk 397.78 crore, which excludes interest, he is yet to pay back the money, it said.
Therefore, the ACC feels the necessity of imposing the ban, the central bank’s letter said.
(NA)
