[🇧🇩] Corruption Watch

[Saif]

Are we becoming incorrigibly corrupt?

Latest CPI score paints a sorry picture of Bangladesh’s progress

www.thedailystar.net

Are we becoming incorrigibly corrupt?​

Latest CPI score paints a sorry picture of Bangladesh’s progress

The latest edition of the Corruption Perceptions Index (CPI) by Transparency International (TI) is now out. And just as predictable as this publication is at this time of the year, it pains us to see that Bangladesh's performance in this annual undertaking by the global corruption watchdog has become equally predictable. In the 2021 edition, the country has once again scored 26 out of 100—the same as in 2020, 2019 and 2018. Once again, we have ranked second-worst in South Asia, above only Afghanistan, and third-lowest among 31 countries in the Asia Pacific region. In fact, a 10-year CPI trend analysis shows that Bangladesh has stagnated in the neighbourhood of the same score over the last decade, meaning there's been no real progress during the two latest tenures of this government.

Since the CPI measures "perceived" levels of public-sector corruption, we may soon see a firm rebuttal from the government, disputing this badge of shame. True, there are questions about the methods used for measuring corruption. But one doesn't need TI to reaffirm what we already know to be true: that corruption has permeated every aspect of our lives, ranging from bribery, use of public office for private gain, diversion of public funds, and nepotism in public sector appointments to red tape and ineffective mechanisms for corruption control—to name a few areas of measurement cited by TI. We have seen repeatedly how a section of officials and politically influential people, including public representatives, indulged in various forms of corruption using their connections and poor institutional safeguards, and how they have been let go. In fact, the all-encompassing nature of corruption means that spillover effects of public sector corruption have ruined any chance of progress in the private sector too.

As a consequence, corruption has become a way of life. We can't get rid of it, but since the system has become so crooked, we can't live without it either. A key factor in the non-delivery of the pledges of "zero-tolerance" for corruption, according to the chief of the Bangladeshi chapter of TI, is the intrinsic linkage among politics, money and corruption, causing a disconnect of public decisions and actions from the common people's interests. "Without a paradigm shift in our political culture to put public interest first, replacing the practice of treating political affiliation as a licence for abuse of power, corruption cannot be controlled," he says. We cannot agree more.

To see a change in this scenario, we need drastic reforms, starting with building a political consensus on the need for insulating public institutions from the influence of politics, money and criminality. The Anti-Corruption Commission (ACC) must be empowered to do its job. There should also be legal provisions to manage conflict of interest transparently, depoliticising institutions of accountability, and establishing professional integrity and impartiality of all vital institutions, including public service, administration and law enforcement agencies. We can't continue to repeat the mistakes of the past or allow the corrupt elements to eat away at the hard-earned achievements of our nation.
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[Saif]

Big budget, bigger corruption

Lack of accountability and the culture of impunity destroyed governance from within.

www.thedailystar.net

Big budget, bigger corruption​

Lack of accountability and the culture of impunity destroyed governance from within

In democracy, there are two types of accountability of the government: first, to the people who elect them, and second, to itself so that it can survive the wrath of public judgement.

This it does by knowing and monitoring whether it is fulfilling its election pledges and whether its own policies and projects are being implemented properly. This happens when the political forces it represents and the government institutions it runs work honestly, efficiently and for the public good. This is otherwise known as "governance," which can principally be assured by institutionalising "accountability."​

This is where the present government has mostly failed, resulting in severely discrediting itself, crippling most institutions – through corruption and cronyism – and demoralising the youth by practising a culture of impunity.​

Let's start with a small example of accountability failure – but one that is highly symbolic.

On November 28, the newly launched Dainik Bangla published a report titled "Taka thakley jail o mukto jiboner moto (If you have money, life in jail is as good as life outside)." The story details how bribery starts the moment one enters the four principal prisons in Bangladesh, and how money can ensure better accommodation, better diet, better living facilities including access to TV and a mobile phone – the latter often used for running illegal business, and even terrorist activities. While going for obligatory court appearances, arrangements can be made for a family visit. Like hotels, you can book hospital accommodation priced at Tk 10,000 for the first week, and half that amount for subsequent weeks. Yaba and other narcotics are also available. Officials know all this, but cannot or will not do anything about it.

Prisons are supposedly under full control of the authorities. If criminal activities cannot be controlled inside, how can the public trust the same authorities to control it outside?
​

A second example of accountability failure deals with delays in project implementation and the enormous cost escalation, with no one being questioned as to why. According to Jugantor of November 28, there was an additional cost of more than Tk 52,000 crore for 10 megaprojects caused by faulty designs, lack of proper feasibility study, additional work, lack of proper leadership and supervision, delay in release of funds, and other reasons. Not a single project was finished on schedule and the time extensions ranged from two to nine years, and still counting. Total funds allocated for these 10 projects amounted to Tk 63,757 crore. These are now estimated to cost Tk 116,198 crore.

A saying prevalent from the colonial days goes like this, "Sarkar ka maal, dariya mey dhal (If it is government money, it is okay to throw it in the sea)." Only now, instead of throwing it into the sea, we put it in our pockets. The Office of the Comptroller and Auditor General (CAG) may raise audit objections, but who has the time to look into them? And it does not pay to do so.

Here again, we raise the point of why no one has been held accountable for such an enormous waste of money. With Tk 52,000 crore, probably every nook and corner of Dhaka city's roads and its essential water supply could have been modernised. Not to be forgotten that the aforementioned amount is for only the 10 projects in question. Literally, there are a hundred others like them.

As for monitoring, there is a body called the Implementation, Monitoring and Evaluation Division (IMED) under the planning ministry. We occasionally hear about their reports, but without much impact as both time extension and cost escalation continue unabated.

Perhaps the most dangerous lapse of accountability is in the financial sector. This writer, in his column of November 17, drew attention to the rise of default loans from Tk 4,646 crore in 1990 to Tk 134,396 crore today – a growth of 29 times in nearly as many years. Here again, the truth is nothing has been done to remedy the situation except to pander to the culprits, which defies all logic and national interest. An exasperated High Court judge reprimanded, just a few days ago, an Anti-Corruption Commission (ACC) lawyer, saying, "Will the big loan defaulters remain untouched? They are misappropriating thousands of crores. The commission is busy catching small-time loan defaulters, but not the big ones."

News of the last few days dealing with loan disbursement of Tk 7,246 crore by the Islami Bank Bangladesh Ltd (IBBL) has shaken the financial sector and have raised serious questions about the monitoring and oversight role of the Bangladesh Bank (BB).

The IBBL disbursed Tk 7,246 crore this year to nine companies that were sister concerns of Rajshahi-based Nabil Group, of which Tk 2,460 crore were issued during 17 days of November. The bank officials told this newspaper that most of the companies gave fake addresses in their loan applications. How can that be? An address is one of the first things that banks check before considering any loan application – and that, too, one amounting to thousands of crores.

There are many more lapses that are unthinkable in the case of large loan disbursement. Either the IBBL staff have forgotten their trade, or its high-ups are more eager to loot it than to run it properly.

It must be mentioned here that the Islami Bank was once among the best banks run in the country. A few years back, it was suddenly taken over and a new board of directors, with a majority of new members and a new chair, was put in charge along with a new MD and some senior officials. How the changeover took place remains a mystery, but its effect is clear now. Surprisingly, the BB, which now monitors even the personal travels of bank MDs, did not take any serious note of this sudden and unexplained – to the public and especially to its depositors – takeover of the biggest private bank of the country.

What the accountability of BB or the finance ministry on this score is, remains a question.

The LC-related story of the Social Islami Bank Ltd (SIBL), which is currently making the rounds, is equally – if not more – horrendous if the BB investigation proves so. Sharpe Knitting and Dyeing Ltd has been using a bonded warehouse facility without exporting a single item. In the process, it has reportedly misappropriated about Tk 16,500 crore over a period of seven years.

Lack of accountability created the environment for this to happen.

At the very moment, banks have become burdened with so much mismanagement and loan defaults that the government amended the law to allow members of the same family to have a larger number of seats in banks' boards and for longer periods than before. This greatly increased family control of banks and weakened professional managers' power to enforce compliance and financial discipline.

Another nail in the accountability requirements.

Bigger budgets, bigger projects, bigger funding, bigger loans being defaulted, bigger corruption, bigger siphoning of project money, bigger amounts of laundered money, bigger houses in Malaysia and Canada, and lesser and lesser accountability.

A role model, indeed.

Post-script

This week, the finance minister asked the press, "How is the state of the banking sector bad? Let us know in writing and we will look into it." Obviously, he doesn't read the newspapers. Doesn't he have a huge staff to keep him informed? The minister does not know, so does it mean that his ministry does not know either? If they don't, then what are they doing, and do they deserve the salary and perks for which the public pay? If they do know, then why doesn't their minister know? There were numerous media reports recently on mega loans to dubious business houses. The Bangladesh Bank has initiated inquiries of its own on some loan disbursements by Sonali Bank Ltd, asking it to be stopped for now. The Parliamentary Committee on Estimates recently issued a report stating, "Sonali Bank's loan situation is frightening."

Yet, the finance minister knows nothing. His ignorance is highly irresponsible, extremely dangerous and totally unacceptable, especially at this critical time.

Mahfuz Anam is the editor and publisher of The Daily Star.​

 

[Saif]

Bank loan-related suspicious transactions surge: BFIU

The Bangladesh Financial Intelligence Unit (BFIU) on Tuesday revealed that suspicious transactions related to bank loans increased more than fourfold in the past couple of...

www.newagebd.net

Bank loan-related suspicious transactions surge: BFIU​

Overall suspicious transactions rise by 64.58pc in FY23​

Staff Correspondent | Published: 19:37, Feb 20,2024 | Updated: 23:08, Feb 20,2024

A file photo shows clients receiving services at a branch of a state-owned bank in the capital Dhaka. — New Age photo

The Bangladesh Financial Intelligence Unit (BFIU) on Tuesday revealed that suspicious transactions related to bank loans increased more than fourfold in the past couple of years due to significant loan scams.

BFIU head Md Masud Biswas disclosed the information while unveiling the unit’s annual report for the financial year 2022-23 at a press conference at the Bangladesh Bank headquarters in the capital Dhaka.

The BFIU is acting as the central agency of Bangladesh to combat money laundering, terrorist financing and proliferation financing of weapons of mass destruction.

The BFIU received a total of 14,106 suspicious reports comprising 9,769 suspicious transaction reports and 4,337 suspicious activity reports in FY23, which is 64.58 per cent higher than the previous year’s 8,571 reports.

Of them, the number of incidents of suspicious transactions related to bank loans shot up to 520 in FY23, which was 341 in FY22 and 98 in FY21.

The BFIU identified several reasons for the surge in suspicious transaction incidents related to bank loans.

The reasons include adjusting loans with large cash deposits or mortgaged assets, inconsistent cash payments, fraudulent loan acquisitions, multiple mortgages on the same property, deliberate non-payment despite cash flow, untraceable loan borrowers, business closures without repayment, misuse of loan funds, media reports on loan scams involving customers, loan scams in other banks even if the customer’s loan in the reporting bank is regular, requests for customer information by competent authorities and customer arrests by law enforcement agencies.

According to the BFIU report, criminals can seek loans to buy high-value assets and repay the loans with illicit money, or they can buy asset with criminal proceeds and take loans against the ‘dirty asset’ to enhance the same or make a new investment.

In both cases, loans or mortgages are repaid with lump sum amount or smaller ‘structured’ amounts, the report said.

According to Bangladesh Bank data released on Monday, the amount of defaulted loans surged to Tk 1,45,633 crore at the end of December 2023 from Tk 1,20,656 crore at the end of December 2022 and Tk 1,03,273 crore at the end of December in 2021.

Out of the total loan related STR/SARs received by the BFIU, it was found that 36 per cent STR/SAR (253 STR/SARs) was lodged on the ground of non-performing loan or wilful default culture issue.

About 409 STR/SARs were submitted by scheduled commercial banks based on concerns of property undervaluation during the registration of land or flats, especially indicating tax evasion.

About 18 per cent STR/SAR was lodged due to loan repayment or source of repayment fund issue, and 7 per cent STR/SAR was submitted on the ground of obtaining the loan through fraudulent means.

The BFIU received 1,112 STR/SARs related to loan issues from July 2018 to June 2023.

The number of such STR/SARs was quite low in the first three years of the mentioned period, but the number increased sharply in the following two years, the BFIU said.​

 

[Saif]

S Alam money laundering probe underway

Breaking News, International News & Multimedia

thedailynewnation.com

S Alam money laundering probe underway​

21 Feb 2024, 12:00 am0

News Desk :

Masud Biswas, head of the Bangladesh Financial Intelligence Unit (BFIU), has said that an investigation into money laundering allegations against Mohammad Saiful Alam, the owner of conglomerate S Alam Group, and his wife Farzana Parveen is underway.

He discussed the matter on Tuesday during an event marking the release of the BFIU’s annual report, which focuses on combating money laundering and terrorism financing in Bangladesh, reports bdnews24.com

The BFIU’s latest report highlights a significant increase in suspicious financial transactions and activities within the country’s financial sector over the past year.

S Alam Group, which has expanded from the edible oil and consumer goods market into the energy sector, came under judicial scrutiny following a newspaper indicating that Alam bought huge amounts of properties abroad without the Bangladesh Bank’s approval.

Asked about the steps taken by the BFIU to address these allegations, Masud said, “Our activities are ongoing based on a court order. We are taking the necessary actions.”

The issue gained public attention on Aug 4, 2023, when The Daily Star published an article titled ‘S Alam’s Aladdin’s lamp’.

A lawyer subsequently brought the report to the High Court’s attention two days later. The court later directed an investigation into the claims that Alam made large-scale property purchases abroad and built a business empire in Singapore valued at approximately $1 billion.

It also asked why the failure of the BFIU, the Anti-Corruption Commission and the central bank to prevent money laundering in this case would not be declared as illegal.

The Daily Star’s report alleged that over the past decade, Alam purchased at least two hotels, two residential properties, one retail space, and other assets, while seeking to remove his name from the paper trails.​

 

[Saif]

US aware of report on ex-land minister Saifuzzaman

US State Department spokesperson Matthew Miller on Tuesday said the US encourages elected officials of Bangladesh to comply with the country’s laws and financial regulations in regards to corruption.

www.thedailystar.net

US aware of report on ex-land minister Saifuzzaman​

US State Department spokesperson Matthew Miller on Tuesday said the US encourages elected officials of Bangladesh to comply with the country's laws and financial regulations in regards to corruption.

The comments were made at a regular briefing in response to a question.

A journalist, citing a detailed Bloomberg report, observed that it was an open secret that people in the Bangladesh regime were involved in corruption.

He said former land minister Saifuzzaman Chowdhury is alleged to have built an empire in the UK and US valued at 200 million pounds sterling, equivalent to one percent of the country's foreign reserve. This is just one case among many.

Miller said, "We are aware of these reports and encourage the Government of Bangladesh to ensure that all elected officials comply with the country's laws and financial regulations."​