Controversial online platform ringID wanted to invest a large chunk of the hundreds of crores of taka snatched from customers in payment service providing business.
For this, Bangladesh Bank also gave experimental approval to the organisation to operate an e-wallet called ringPay BD Limited. However, the central bank hastily cancelled the no-objection letter on 26 September after criticism started across the country over ringID.
Saiful Islam, director of ringID, during police interrogation following his arrest, confessed to this, said Mohammad Rezaul Masud, special superintendent of police at CID's cyber police centre.
He told The Business Standard, "In the Ponzi Scheme method, one person's money is usually given to another person as profit. RingID was also following that path. But at one stage, they stopped selling IDs and trading virtual coins, because they realised that it would not be possible to pay money/profit to the customer for a long time in this way. That is why they wanted to invest the embezzled money in e-wallet."
Another CID official said, to set up an e-wallet called ringPay, they rented an office of about 70,000 square feet at Niketan in the capital. They also recruited manpower and started taking other preparations.
Meanwhile, in a letter sent to City Bank Limited's managing director, Bangladesh Bank said ringPay BD Limited was given a no-objection letter on 8 March last year, for obtaining a license within a year, after building the infrastructure to provide e-wallet services as a Payment Service Provider (PSP). The no-objection letter has been cancelled due to failure in commencing commercial activities within the stipulated time and the expiry of the NOC.
Mezbahuddin, general manager of Bangladesh Bank's payment system division, told TBS that a PSP license has to be obtained within a year of the issuance of a no-objection letter. The no-objection letter given in favour of ringID was cancelled as they could not build any infrastructure even after the passage of one and a half years.
However, the Bangladesh Bank official declined to comment on why the no-objection letter was abruptly cancelled after criticisms over ringID surfaced in the media.
Hundreds of crores of taka embezzled, most victims are expatriates
CID official Rezaul Masud said we have found evidence that about Tk213 crore had been withdrawn from three bank accounts of RingID in three months (May-July) of this year. Apart from this, according to the preliminary investigation, about TK302 crore has been transacted through the payment gateway system.
"Such a huge amount of money has been withdrawn in just three months, so, it stands obvious that the total amount of money embezzled in a year could exceed Tk1,000 crore. However, the information we received is only from ringID's bank accounts. We have written to the Bangladesh Financial Intelligence Unit (BFIU) asking for the personal bank account details of ringID Chairman Shariful Islam, his wife, and also managing director Irene Islam, and director Saiful Islam. The total amount of embezzled money can be calculated once we get their bank details. Already, three bank accounts that are in the name of the company have been frozen where Tk150 crore is deposited," he added.
The CID official further said we are receiving phone calls from the victims since the arrest of Saiful Islam. Most of the calls are coming from expatriates.
Ashraful Alam, special superintendent of Police and also investigation officer of the case, told TBS, "I am trying to find out the destination of the embezzled money during interrogation. As the company's chairman and MD have been staying in Canada for several years, possibly the money had been smuggled there."
He said as ringID had more than 1,000 brand promoters, 600-700 agents and 1.5 lakh IDs, about 20 million members, the Shariful-Irene couple tried to bring in foreign investments as well.