Amid the unravelling of frauds by e-commerce firms, it now appears the infection has gone deeper as officials said around Tk1,300 crore might have been siphoned off Bangladesh by Foster — a payment gateway for beleaguered e-shopping platforms Evaly, Eorange, Adyan Mart and Qcoom.
The Bangladesh Financial Intelligence Unit (BFIU) recently asked the Criminal Investigation Department (CID) of police to take action against Foster, several Bangladesh Bank and CID officials in conditions of anonymity told The Business Standard.
Also, the Bangladesh Bank (BB) has ordered to suspend all transactions and refund activities of the payment gateway until further notice, confirmed another senior BFIU official has confirmed.
Foster's business got a shot in the arm after the Bangladesh Bank introduced 'escrow', a third-party payment gateway service.
Now CID says police are not finding out Foster officials as none of them are in Bangladesh.
According to CID Special Police Super Humayun Kabir, Forster's name first came up during an investigation against a gaming app that allegedly laundered crores of taka.
A senior BFIU official said it is difficult to say exactly how much Foster has laundered without a detailed investigation. However, the company has been accused of siphoning off around Tk1,300 crore.
"Such companies resort to various unofficial and unauthorised transaction channels such as hundi for money laundering. We are looking into allegations," he said.
A senior CID official told TBS that Foster Chairman Mahbub Motin and Managing Director Jamal Khal is currently in hiding in Malaysia, where the company siphoned most of the money. Also, its Chief Executive Officer Fakhrul Islam and Additional Managing Director Mishu has not left the country, but are in hiding.
CID has sent a letter to the payment gateway's office in Gulshan asking it to disclose how much money it owes to five e-commerce companies, including Evaly, Eorange, Qcoom, Adiyanmart, Dalalplus, within five working days. However, the office was found to be closed.
Foster had been in operation since 2011 while the company applied with the Bangladesh Bank for the licence in 2015.
Talking to The Business Standard, Chief Executive Officer (CEO) of Foster Corporation, Fakhrul Islam said "We did not close the office or shut down our office operation. CID has sought information from Foster over the money that has been stuck in the payment gateway which is still under process."
Besides, he escaped the answer when reporter asked him over laundering money to Malaysia in the name of gaming company and said "Our authority will respond to the matter at office."
Foster did not get the licence, but the central bank awarded it a no objection certificate (NOC), said Mezbaul Haque, general manager at the Payment Systems Department of the central bank.
On 4 July, the central bank introduced the escrow service for rogue e-commerce players like Evaly and Dhamaka in the face of widespread allegations of fraud and irregularities against them. The launching of the system paved the way for wider business for escrow service providers like Foster.
In escrow payment service, money paid by customers for ordered goods from e-commerce companies gets deposited in third-party payment gateways such as Foster. The companies receive the money after submitting related documents proving the goods have been delivered.
Ever since the launch of the escrow service, a huge amount of money started to be deposited in the accounts of payment gateway services, including Foster.
However, many e-commerce companies allege that the payment gateway services did not pay them on time.
The commerce ministry has been informed about such irregularities by the escrow service providers, Md Hafizur Rahman, additional secretary and head of the Digital Commerce Cell of the ministry told TBS.
Foster officials claim they are providing service in accordance with the central bank's regulations.
"Our account is still active. We applied to the Bangladesh Bank for a license in 2016. Although we did not get it, we are conducting activities under the (regulations) of the bank," said Al Beruni, senior manager, Corporate Finance Department of Foster.
He claimed to be unaware of the allegations of money laundering against the company.
New sub-committee formed
The commerce ministry on Tuesday has formed a nine-member internal sub-committee to review whether there is a necessity to form a new regulatory body and laws to put a halt to the rampant e-commerce fraud and bring back order to the sector.
The committee will review the existing laws and submit its recommendation on the necessity for new laws or amendments within 30 days.
Earlier, a commerce ministry meeting on 22 September had decided to form a regulatory body and draft a digital e-commerce law in order to prevent e-commerce fraud. A 16-member law enforcement committee was formed five days later in this regard.
The sub-committee, comprised of representatives from the Bangladesh Bank, the law ministry, Bangladesh Competition Commission, Directorate of National Consumer Rights Protection, BASIS, Access to Information Programme, etc, was formed at the first meeting of the law enforcement committee.