Trust Bank rejects money laundering accusation against ex-chairman

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FE Report
Trust Bank Limited Monday dismissed the accusation of misappropriation and laundering of money from the bank by its former Chairman Lt. General (Retd) Hasan Mashhud Chowdhury, as has been alleged by former executive chairman of the Board of Investment Mahmudur Rahman.
"Trust Bank makes it unambiguously clear that no case of misappropriation/ laundering of Bank's money, by any Chairman or Director, has ever occurred since the inception of the Bank," said a Trust Bank press release, issued by its Company Secretary Farhad Uddin.
It, however, said since the reports regarding the accusations have been published in deferent newspapers, the Bank finds it necessary to clarify the matter in order to remove the confusion that might have caused to the depositors and valued customers of the Bank as well as members of the public.
"The Bank also makes it clear in unequivocal term that in accordance with the demarcation of power between the Board of Directors and the Management as provided by Bangladesh Bank, in its BRPD Circular No. 9 dated 17 Sep 1996 (later replaced by BRPD Circular No, 16 dated 24 July 2003), Directors of a bank company cannot take part in the operation activity of the Bank, their role being limited to framing of policy and approving business strategy and proposal," the press release said.
Thus, the question of misappropriation/laundering of Bank's money by the Chairman does not arise at all, it added.
The factual position, the press release said, was that Trust Bank suffered a loss of Tk 230.70 million (23.07 crore) in its foreign exchange dealing operation during the period between January 2002 and July 2003.
Launching of foreign exchange dealing operation was approved by the then Board of Directors in September 2001, it mentioned, adding that Mr. Hasan Mashhud Chowdhury became Chairman of the Bank in July 2002,
The operation of foreign exchange dealing commenced in January 2002 and had incurred loss right from the beginning of the said operation, it mentioned, adding that the then Managing Director of the Bank did not disclose the loss to the Board of Directors and the Bank's annual accounts of 2002 were prepared without showing the loss.
"The loss-making venture continued till July 2003, but was kept hidden by the then Managing Director from the Board until the occurring of loss was detected in early August 2003 after Bangladesh Bank conducted an inspection of the Bank's foreign exchange operation and asked for explanation from the Bank's Management regarding un-reconciled balances of Bank's overseas foreign currency accounts (usually called NOSTRO accounts)," it said.