Loan defaulter gets clearance from BB

FE Team | Published: May 07, 2010 00:00:00 | Updated: February 01, 2018 00:00:00

Mohammad Mufazzal
A director of a company despite being a loan defaulter was handed a no-objection certificate of the central bank paving the way for his unit to go public.
The Credit Information Bureau (CIB) of the Bangladesh Bank issued the certificate in favour of United Airways Director Shahjahan S Hasib, subsequently, upon which the Securities and Exchange Commission (SEC) gave it the go-ahead to float initial public offering (IPO).
However, an SEC official said, "The incongruity in the approval will not affect the IPO procedure of United Airways, as the director has resigned."
At the time of issuing the approval on April 1 last, the SEC did not know the director was a loan defaulter, as the CIB certificate cleared him.
When Bank Asia came to know it after publication of the company's IPO prospectus in newspapers, the bank turned to the SEC.
But the SEC said it had nothing to do with that, as the director got a 'no objection' letter from the CIB.
Mr Shahjahan S Hasib borrowed Tk 12.5 million from Bank Asia's Karwan Bazar branch, it said.
The CIB and the company, however, have denied doing anything wrong in the process.
"We did nothing. If the commercial banks certify their clients as honest, we also do that," said Mohammad Abdul Hai, general manager of the CIB.
"If the banks declare someone dishonest, we call him dishonest," he added.
An official of the share department of the United Airways said, "We didn't know Mr. Shahjahan was a loan defaulter, as he never disclosed it to us. When we came to know, we told him to resign from the board of directors and he did so."
As per rules, before going public a company is required to submit its list of directors to the SEC, which sends it to the CIB for verification on the basis of the latter's database.
After checking details of the company and its directors on the database, the CIB issues no-objection certificates in favour of them.
Bank Asia said it had been totally in the dark about the whereabouts of Mr Shahjahan for long three years.
If a borrower fails to pay three installments, he comes under the 'special mention account'. If he misses six installments, he comes under the head 'classified.'
The bank said Mr Shahjahan became a bad loan defaulter, as he failed to pay more than six installments.
"We wanted to know from the BB how Mr. Shahjahan got the clearance as a non-defaulter," Mr Borhan Uddin, manager of the Karwan Bazar branch, said.