Tk 7.09b embezzled, Tk 700m siphoned off

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Jasim Khan and Rezaul Karim
An in-depth investigation by Bangladesh Bank (BB) into the affairs of Destiny Multipurpose Cooperative Society Ltd, has led to unearthing of embezzlement of an amount of Tk 7.09 billion (Tk 709.70 crore), in the name of commission payments, by 12 of its directors.
It has also found that an amount of Tk 700 million (Tk 70 crore) has been siphoned off abroad through money laundering by one of its overseas directors.
The company's assets grow at the rate of 358. 82 per cent within a period of one year and nine months from Tk 10.76 billion in June 2010 to Tk 26.19 billion in March 2012, according to the findings in the report by the BB team of investigators.
The BB's Bangladesh Financial Intelligence Unit (BFIU) conducted the investigation at 11 banks to unearth the irregularities of the multi-level marketing (MLM) company.
"The directors of Destiny Multipurpose Cooperative Society Ltd (DMCSL) disbursed Tk 7098.10 million (709.81 crore) among themselves as promotional expenses from its assets and we guess that the entire amount of money has been misappropriated by themselves," a high official of the BB who is also a member of prove team, said.
The investigation also found that one of its overseas director Noel G. Carey laundered Tk 700 million in guise of payment through one of its letters of credit (LCs).
"The Tk 700 million import payment has been made to the same man where no physical goods or services were transferred. We are sure that the transaction was made to launder the amount involved in the name of import of goods," the official added, preferring anonymity.
The BB official said they will handover the investigation report to the Anti-Corruption Commission (ACC) within the next couple of days to start ACC's own investigation and file cases against Destiny.
According to the findings under the investigation, the DMCSL amassed wealth to the tune of Tk 33.5 billion as on March 31, 2012 of which an amount of Tk 11.1 billion was received from Destiny 2000 Ltd., Tk 7.09 billion was distributed among
directors as commission and Tk 5.49 billion was "involved" in deals in land, buildings etc.
The report observed that 37 concerns of Destiny 2000 limited, along with their directors, hold a total number of 443 bank accounts where funds worth only Tk 1.77 billion could be traced. Among the total number of bank accounts, 225 were found closed.
The BFIU investigated the branches of Islami Bank, Shahjalal Bank, South East Bank, Trust Bank, Dutch-Bangla Bank, Standard Chartered Bank, Prime Bank, HSBC Bank, Brac Bank, The City Bank and Premier Bank.
The directors deposited Tk 49.95 billion and withdrew Tk 49.75 billion during the said period (30-06-2010 and 31-03 2012), to, and from, their bank accounts.
The most part of the amount might have withdrawn and were being kept as cash (mattress money) for which it will take time to locate the fund, the BB official said.
"The number of accounts and volume of transactions are very large which will need time to find out details of particulars about where the funds were transferred and who own the amount," the BB official added.
According to the website of the company, most big deals in land and buildings and others were, conducted by the DMCSL.
The cooperative began operations in 2005. In 2006-07, it had Tk 1.947 million (19.47 lakh) in current assets and Tk 0.449 million (4.49 lakh) in fixed assets, according to its 2010-11 annual report.
Destiny-2000 Ltd was registered with the Department of Co-operatives in 2000 and began operations the same year.
According to Destiny-2000 Ltd website, the company has 37 sister concerns in aviation, newspaper, TV channel, printing press, food, medical college and agro-business.
About four million distributors joined the company since its inception in December 2000, it said.
In last October, the ministry of commerce drafted a law on direct sales. But it is yet to be placed before the cabinet for approval.
Meanwhile, the parliamentary standing committee on the ministry of commerce asked the ministry to expedite the task for framing a law to oversee the activities of MLM businesses and prevent fraudulence by such companies.