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Bangladesh Bank asks BSEC to freeze BIFC shares owned by ex-chief Mannan

  • Published at 10:51 pm March 7th, 2019
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The central bank’s move came following an Anti-Corruption Commission (ACC) advice

The Bangladesh Bank has asked the Bangladesh Securities and Exchange Commission (BSEC) to freeze shares of Major (retd) MA Mannan, former chairman of Bangladesh Industrial Finance Company Limited (BIFC), other organizations owned by him and people close to him from transferring shares of the company.

The central bank’s move came following an Anti-Corruption Commission (ACC) advice asking it to impose such ban till Mannan clears the outstanding loan of Tk397.78 crore owed to BIFC, excluding interest.

The Bangladesh Bank on February 26 sent a letter to the stock market regulator in this regard, which BSEC received 5 March, confirmed Bangladesh Bank officials.

Mannan is an MP from the Lakshmipur 4 constituency, and the secretary general of Bikalpa Dhara Bangladesh. He is also the chairman of Sunman Group and the former chairman of   Eastern Insurance Co Ltd and Sunflower Life Insurance Co Ltd.

A central bank official said: “The ACC on February 10 sent a letter to the central bank advising it to ban BIFC share transactions by Mannan and people close and connected to him as Mannan was dilly-dallying in paying Tk397.78 crore in outstanding loans of BIFC.”

According to the ACC letter, an investigation conducted by ACC detected that Mannan and 75 organizations, in which he had interest, had taken Tk517.61 crore in loans from BIFC.

After the investigation, Mannan accepted the liability of the loans and paid Tk119.83 crore of the received loans, it said.

Although Mannan promised to return the balance Tk397.78 crore, excluding interest, he has yet to pay back the loans, it added. 

Therefore, the ACC feels the necessity to impose the ban on transferring BIFC shares by Mannan and people close and connected to him, the letter said.

The bank official further said: “As the BSEC deals share transfer of all companies, the central bank made the request to the stock-market regulator to take necessary steps against Mannan.”

It was learnt the loans Mannan and companies linked to him received, are more than 60% of BFIC’s paid-up capital.

The classified loans of BIFC, stood at Tk608.85 crore, according to the news disseminated by the company on the DSE website.

BIFC: Mannan main beneficiary of the loans

The news disseminated by BFIC in May 2018 reads: “As per Bangladesh Bank Special Inspection Report dated June 24, 2015, about Tk518.00 crore was sanctioned and disbursed in favour of different borrowers in highly irregular and fraudulent ways.

“They also detected that ultimate beneficiary of these loans were Major (retd) Abdul Mannan, chairman Sunman Group and former chairman of BIFC.”

As per BIFC’s audited report for the year ended December 31, 2017, total loan, advances and lease amount of BIFC was Tk837.60 crore out of the classified amount Tk798.33 crore (95.31%), which the company reposted to DSE. 

Bad loans, lease, amount of borrowers related to Suman Group is Tk621 crore which is 77.79% of total classified loans amount, it said.

The shareholding position of BIFC, the sponsor-directors hold 37%, institutions 46.18% and the rest 16.82% are held by the general public.

According to the a Bangladesh Bank investigation in 2015, Mannan and his family members including his wife Umme Kulsum Mannan falsified documents  and altogether hold 62% stake with BIFC.

Mannan entered politics and was elected an MP from the Dhaka 10 constituency in 1991 and 2001. He was former minister of state for the Ministry of Textiles during 1991-1996. Initially, he started his career as an army officer and retired as Major in 1976.

Bangladesh Securities and Exchange Commission (SEC) spokesman Md Saifur Rahman told the Dhaka Tribune: “We received a letter from Bangladesh Bank on this issue. The commission will take action.”