The board of scam-hit International Leasing and Financial Services (ILFS) has been restructured once again, with seven new independent directors to ensure its smooth operation.
The Bangladesh Bank (BB) has appointed seven new independent directors, including chairman, to the non-bank financial institution (NBFI) as per a High Court order, replacing the previous ones, according to a regulatory filing on Tuesday.
Md Mahbubul Hoque (former deputy auditor general) has been appointed as chairman while independent directors include Md Abdul Mannan (former executive director, Bangladesh Bank), Md Ashrafuzzaman, (a former executive of Shahjalal Islami Bank), Abu Habib Khairul Kabir (former deputy managing director of Pubali Bank).
Other independent directors are barrister Mohammad Ashraf Ali, (advocate, Supreme Court of Bangladesh), Md Mustafizur Rahman Sardar, (retired executive director, Bangladesh Bank) and Ahmad Mushfeq Anam, (managing director, X-ter).
BB officials said the board was restructured for ensuring compliance and overcoming the financial issues of the company towards building confidence of depositors.
Earlier in 2020, the board of the company was restructured as per a court order.
Why did International Leasing fall into trouble?
International Leasing is one of the four NBFIs that fell victim to loan scams committed by Proshanta Kumar Halder, alias PK Halder, and his associates.
PK Halder, former managing director of NRB Global Bank, who was arrested in India in May 2022, swindled a large amount of money from the NBFIs.
A Bangladesh Bank investigation found that PK Halder had reportedly siphoned off nearly Tk 10 billion by taking a series of loans from International Leasing under different names.
The allegation of embezzlement against PK Halder emerged from an enquiry of the Anti-Corruption Commission (ACC) in 2020.
International Leasing has been suffering losses for the past five years. Cumulative losses amounted to Tk 41.26 billion by 2023. It also reported a loss of Tk 634 million in the nine months through September 2024. The company also failed to declare any dividend after 2018.
The auditor of the company raised a red flag for the continuation of the business as its key financial indicators were in the negative in the five years to 2023.
High classified loans, negative capital adequacy ratio, excess liabilities and big losses put International Leasing in trouble and there are significant doubts about its survival, said the company's auditor after reviewing its financial statements for 2023.
More than 90 per cent of total disbursed loans of the company turned sour as of 2023. The finance company also failed to keep required provisions due to the high volume of classified loans.
Currently, International Leasing owes approximately Tk 43 billion to its depositors and the company is struggling to meet its repayment obligations.
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