BB finds Sonali's top brass involved in Hallmark scam

FE Team | Published: August 28, 2012 00:00:00 | Updated: February 01, 2018 00:00:00

Siddique Islam
The central bank has found involvement of the top management and directors of the Sonali Bank Ltd in the financial irregularities, in which companies, including Hallmark Group, swindled Tk 35.47 billion out of the bank's Ruposhi Bangla Hotel branch in the city.
Bangladesh Bank (BB) Governor Dr Atiur Rahman sent on Monday a letter to Finance Minister AMA Muhith containing findings of its probe report on the scam for immediate action.
The BB probe report said the money had been swindled by some companies, including Hallmark Group, in connivance with the senior management staff of the bank. It also identified monitoring failure of the board of directors of the country's largest state-owned commercial bank which aided swindle of the money.
Recommending reconstitution of the board of directors, the central bank said outright that the bank directors had failed miserably to protect the interest of depositors.
The finance minister also reviewed on the day the overall situation at the Sonali Bank in a meeting with its Chairman Quazi Baharul Islam at his Secretariat office, officials said.
A total of Tk 35.47 billion has been misappropriated from the Ruposhi Bangla Hotel branch of the Sonali Bank through forgery. Of the amount, the Hallmark Group alone managed to embezzle Tk 26.86 billion.
In the probe report the central bank has also detected financial irregularities in two other branches of the bank - at Gulshan and at Agargaon in the city.
"It's not believable that the money has been swindled without knowledge of the officials working at different stages of the bank management," the BB letter said, terming the nature of the financial irregularities grave.
"It has been proved beyond doubt that embezzlement of the large amount of money has taken place with full knowledge of the top management of the bank."
The all three financial scams have cast an adverse impact on the state-owned commercial bank as well as the country's entire banking sector, it noted.
The central bank also said such scam could take place because of lax monitoring, poor risk management, faulty and inadequate internal control system at the Sonali Bank.
The responsibility for the irregularities lies with the board of directors of the bank as the board has utterly failed to carry out their duties in line with the bank's memorandum of articles, the letter said.
Instead of taking punitive measures against the official concerned, the audit department of the bank in a report praised him and later gave him promotion, the central bank probe found.
"If the finance ministry does not implement the BB recommendations, those responsible for the financial crime may go scot-free," feared a senior banker while talking to the FE.
He also said the BB could take action against any bank under the Section-45 of the Bank Companies Act but it did not do so in the case of Sonali Bank.
Earlier on Sunday, the BB asked the managing director (MD) of the Sonali Bank to suspend temporarily 31 officials, including two deputy managing directors (DMD) in the Hallmark loan scam.
The Sonali Bank authorities have already suspended two officials, out of the 31, in line with an earlier instruction issued by the central bank.