Ailing non-bank financial institution First Finance’s insistence on having Md. Tuhin Reza, who has a track record of irregularities behind him, as its managing director and chief executive officer is rather baffling.
Despite the Bangladesh Bank rejecting the NBFI’s application for his appointment once on January 20, First Finance applied again on March 4.
On March 15, the central bank rejected the application for the second time.
In the letter to First Finance Chairman Khan Mohammad Moinul Hasan, the BB called for taking the necessary steps for appointing a regular MD and CEO to the NBFI at the earliest. Dhaka Tribune has a copy of the letter.
Reza joined First Finance as additional MD in 2016. A year later, some serious allegations against him came to light.
Of them, two major allegations were: hiding Credit Information Bureau (CIB) status and removal of the CIB copy from the personal documents by abusing power; and recruiting 22 officials to the NBFI without any notification, examination or interview, which violates the service rules of the organisation.
An internal investigation committee of First Finance even found those allegations to be true and the board of directors forced him to resign in May 2017.
It was surprising that the NBFI then re-appointed Reza as the additional MD without the BB approval, which was a direct violation of rules, said a BB probe report.
When the BB asked for an explanation about the issue, the board replied to the central bank that the allegations against Reza were misleading and unproven, which was why he was re-appointed.
Then in October of 2019, he was given the current charge of the post of the MD and CEO after the post became vacant.
In March last year, the board of directors of the NBFI decided to appoint him to the post of MD and forwarded its decision to the BB for approval.
The BB probe report said the financial condition of the NBFI has gradually deteriorated from 2017 to 2019.
First Finance was going to the red zone during the period and its profit-after-tax has become negative from 2017 to 2019, as per the BB probe report.
Then on January 7, the Anti-Corruption Commission (ACC) interrogated Reza about the allegations of embezzling money through irregularities and corruption.
Reza could not be reached over the phone for comment.
The central bank inspection team found at least 10 NBFIs were involved in loan scam and huge irregularities, which impacted the sector’s overall financial health.
At the end of the third quarter of 2020, the 33 NBFIs’ bad loans accounted for about 15.5 per cent of their total outstanding loans of Tk 66,215.4 crore, according to data from the central bank.