SM Amzad Hossain, the immediate past chairman of the new generation South Bangla Agriculture and Commerce (SBAC) Bank, labelled a habitual defaulter by the Bangladesh Bank, has allegedly embezzled Tk20 crore from his bank by opening a fake company using his company employees.
Capt M Moazzam Hossain, involved in loan irregularity, was entirely responsible for dragging the People's Leasing and Financial Services (PLFS) into collapse, and has been found to be an accomplice of Amzad in the SBAC misappropriation, according to an inquiry by the corruption watchdog.
The latest inquiry by the Anti-Corruption Commission (ACC) uncovered the fraudulency and it filed two cases on Monday against Amzad and Moazzam based on the findings.
Since the bank's inception in 2013, Moazzam was the director of the board of the bank and Amzad was the chairman. However, Amzad resigned from his post in September last year on personal grounds. A month after his resignation, Moazzam also stepped down from the board.
Despite having numerous fraud allegations, both men were seemingly blessed by the Bangladesh Bank, as the authority did not stop them from joining the SBAC board with depositors' interests taking a backseat.
The central bank, in several investigations, had already found instances of loan forgeries and money-laundering against the duo.
In its own damning report, the Bangladesh Bank had labelled Amzad a habitual defaulter while he was the chairman of SBAC.
Moreover, he also held the post when he defaulted on a Tk58 crore loan with Janata Bank.
Despite that, the central bank authority did not take any action to remove him from his post or take any other action.
Even today, Amzad and his wife Begum Sufia Amjad are continuing to be board directors of the bank.
Similarly, in the case of Moazzam, the central bank, in its own investigation, identified him as one of the main culprits for hollowing out the PLFS. With Moazzam as its chairman between 2004-2013, massive corruption of Tk670 crore by PLFS directors forced the financial institution to go for layoffs.
And with the old adage proving true, when Moazzam was approved by the Bangladesh Bank to become director of another new bank, he did what he knew best: repeat the scam.
Authority promoting fraudsters to misuse banks?
Not only the Bangladesh Bank, surprisingly, fraudsters can easily slip under the nose of other authorities.
For instance, despite having a travel ban from ACC, Amzad fled to the USA in November last year.
Addressing the issue, the High Court criticised the ACC, the police, the immigration police authorities and the Bangladesh Financial Intelligence Unit, asking them how the former SBAC Bank chairman could flee the country.
Findings of the ACC enquiry
In the case statement, the ACC said that the name of Moazzam Hossain came up repeatedly while investigating the PLFS looting. Now the name of Amzad Hossain has also been added to that list.
Both directors embezzled money from the bank by taking loans against two fake companies. The names of the two companies are -- Rafi-Mahi Corporation and Al-Amin Corporation.
Digging deeper into the companies, anomalies begin to surface.
AKM Asif Uddin, owner of Rafi-Mahi Corporation on paper, in reality is actually an employee of the Lockpur Group, where Amzad is the chairman.
Asif knows nothing about the business but he opened the company in this name at the instruction of his employer, he admitted to the ACC.
According to his statement given to the ACC, Amzad paid him for taking the licence and also took his signature in the cheque book for the shell company.
The ACC team visited the address of the company, but found no offices.
After opening the company, it applied for a loan of Tk12 crore from the SBAC bank, which its Motijheel branch approved in 2017, without even taking any mortgage.
The branch manager allegedly helped Amzad to withdraw the loan amount, according to the ACC statement. The loan record shows that the money was later transferred to different companies owned by Moazzam and Amzad between 2017 and 2018, in violation of the Money Laundering Act, 2012.
The loan was not used for the purpose it was approved for, but the bank did not monitor it further, the ACC statement said.
Another company, Al-Amin, is owned by one Masudur Rahman.
A manager of the Bijaynagar Branch approved a loan of Tk8 crore against the work order of the company without informing the head office.
The ACC investigation team found no documents relating to the loan approval in the respective bank. The loan amount was withdrawn from the bank by various employees of Lockpur Group.
According to the ACC statement, the respective branch manager helped Amzad withdraw the unapproved loan from the account, in another violation of the money laundering act.
Both directors admitted to taking those two loans at a board meeting held on 16 August last year and committed to return the money in six months.
The board resolution proved that Amzad and Mozzam embezzled money from the bank.
The SBAC started its journey in 2013 with several controversial directors on its board. At least six out of the 15 directors in the board were involved in loan scams and other controversies.
The default loan of the bank was nil until 2016, but it jumped to 6% in 2019, from 1% in the previous year.
In September last year, the bank's default loans stood at 5.71%.
The bank was listed with the Dhaka Stock Exchange last year and its last trading price was Tk16.30 on Monday.