Sonali Bank has filed twelve cases against Bangladesh Bank, seeking reimbursement for the funds debited by the central bank from its account in connection to the Hallmark financial scam incident.
The Hallmark scam took place at Sonali Bank’s Ruposhi Bangla branch between 2010 and 2012. The central bank had to pay out Tk892 crore to other banks and used funds debited from Sonali Bank’s account to do so.
According to several officials from Sonali Bank, the cases were filed recently with Dhaka’s first joint district judge’s Court, and more cases are set to be lodged soon.
The Sonali Bank is currently seeking a repayment of Tk71.57 crore from the Bangladesh Bank.
Speaking to the Dhaka Tribune, Sonali Bank’s panel lawyer Jahangir Alam said: “Despite my client’s objection, the central bank had debited Sonali Bank’s funds and gave them to other banks.
“However, investigations carried out by both the central bank and Sonali Bank have revealed evidence of many irregularities.”
According to Sonali Bank officials, the central bank had debited Tk892 crores from the bank’s account.
The Sonali bank filed the cases against the Bangladesh Bank stating that the deduction was illegal, as the central bank in its own investigation found that Hallmark used fraudulent means to obtain those loans.
The central bank had previously mentioned that other banks will reimburse Sonali Bank’s funds if tangible evidence supporting the scam allegation is found.
Case documents at a glance
In its case statements, the bank mentioned that a major credit scam such as Hallmark occurred, due to the central bank’s inability to properly supervise the Ruposhi Bangla branch of Sonali Bank.
The statement further read that the central bank must repay the money back with interest. The bank had also sent repeated requests to the central bank not to debit funds from its account several times, but received no response.
One of the 12 cases was filed seeking a reimbursement of Tk4.6 crores.
Along with Bangladesh Bank, Jamuna Bank Ltd, Islami Bank Ltd, National Bank Ltd, Dutch Bangla Bank Ltd, Eastern Bank Ltd, Prime Bank Ltd, Southeast Bank Ltd, and Basic Bank Ltd have been named in the case.
Suspended Sonali Bank officials and authorities of a number of companies have also been accused.
Another case was filed seeking a repayment of Tk1.37 crore.
In that case, the central bank, Hallmark, Al-Arafah Islami Bank Ltd, Jamuna Bank Ltd, Mutual Trust Bank Ltd, National Bank Ltd, Prime Bank Ltd, Trust Bank Ltd, Woori Bank, and a number of suspended officers of Sonali Bank were named.
The other ten cases also have many of the above mentioned banks and companies named as the accused.
Sonali Bank filed its first case over the matter on February 28 this year, and two cases were filed that day. Two more cases were filed on March 7, two on March 11, one on March 12, three on March 14, and two on March 18.
A tale of deception
The documents of one of the cases, which was filed seeking a reimbursement of Tk4.6 crore, stated that on January, 2008, Dress Me Fashion Ltd opened a current account with the Sonali Bank’s Hotel Sheraton Corporate branch.
Dress Me applied for a loan with the Sonali Bank with facilities such as cash letter of credit, back to back letter of credit, and shipment cash credit loan for importing garment machinery and export garments products.
Following the application submitted by Dress Me Fashion Ltd Managing Director Md Tawhid Hossain, Sonali Bank head office approved the loan through the Hotel Sheraton Corporate branch.
The company enjoyed the highest credit limit of Tk16 crores and PSC limit of Tk1.60 crore. The company applied again for LCs to import band new machinery.
Dress Me Fashion later requested the branch manager to open a number of the LCs without depositing any margin money. The bank also opened back to back LCs, but the company did not pay the due amount.
Chairperson of Dress Me Fashion Jinat Fatema, MD Tawhid Hossain, and Director Md Taslim Hassan also took out multiple loans amounting to crores of taka using several front companies, such as T and Brothers Nit Composite Ltd, Spartek Ltd, and LNS Accessories.
Later the company made fabricated documents to misappropriate the funds.
The case document further stated that several officers of Sonali Bank’s Sheraton branch helped the company make fabricated documents at a rented apartment near the bank.
The act of preparing fabricated documents took place on nights or weekends when the branch was closed.
They used the names of front companies such as AG Trading, Apparel 21 Ltd, Arif Nit spin Ltd, Hossain Dyeing and Printing Mills Ltd, NRG Composite Yarn Dyeing, NRG Composite Spinning Mills Ltd, Saleha Printing, and Trade Mode Trimming.
None of these companies had any offices or factories.
In October of 2012, Bangladesh Bank exposed the scam, which became infamous as the Hallmark financial scam, involving funds amounting to Tk3,700 crores. Criminal cases were filed in this connection.
This particular case statement stated that Sonali Bank had sent six letters to the Bangladesh Bank requesting it not to make payments against the non-funded liability of the bill.
However, Bangladesh Bank made payments amounting to Tk3.13 crores from Sonali Bank’s account to Jamuna Bank Ltd, Islami Bank Ltd, Dutch-Bangla Bank Ltd, Eastern Bank Ltd, Prime Bank Ltd, Southeast Bank Ltd, and Basic Bank Ltd, despite knowing the facts that the loan documents were false.