The central bank appointed Howladar Yunus& Co., the representative of the American audit firm Grant Thornton in Bangladesh, to assess the NBFI’s actual assets and liabilities
Bangladesh Bank has dispatched an auditor to the People's Leasing and Financial Services (PLFSL) that is in the process of liquidation for assessing the non-bank financial institution’s actual assets and liabilities with the intent of reconstructing the ailing company.
The central bank appointed Howladar Yunus & Co., the representative of the American audit firm Grant Thornton in Bangladesh, to assess the NBFI’s actual assets and liabilities after a meeting with the interested investors in PLFSL on February 17.
Before the move, Shamsul Alamin Group, a real estate company, and two other groups jointly applied to the finance ministry last year to invest in the NBFI and take over the liabilities of the ailing company.
The finance ministry forwarded the application letter to the central bank and the BB got approval from the High Court to reconstruct PLFSL.
However, three directors of Shamsul Alamin Group were on the board of the PLFS for ten years until 2015.
The group was accused of being involved in the loan irregularities of the ailing NBFI, according to central bank findings.
Alamgir Shamsul Alamin, who is also the president of the Real Estate and Housing Association of Bangladesh (REHAB), is the managing director of the business group.
“We sought a final proposal from the group as per the direction of the High Court,” said a top official of the central bank seeking anonymity to speak candidly on the matter.
In this case, the interested group wanted to know the actual assets and liabilities of the company.
“That’s the reason for appointing an audit firm.”
The interested investors will have to submit their proposal for reconstructing the NBFI within two months of the appointment of the audit firm, according to the BB official.
After receiving their final proposal, it will be reconstructed as per the direction of the High Court only if the BB is satisfied after examining the proposal.
The liquidation process of PLFSL will continue until the reconstructing process is finalised, he added.
“After the completion of assessment by the audit firm, we will evaluate the actual assets and liabilities of the company and send a final proposal to the Bangladesh Bank,” Alamgir Shamsul Alamin, managing director of Shamsul Alamin Group, told Dhaka Tribune.
So nothing can be said before the assessment by the audit firm, he added.
The government also wanted to reconstruct PLSFL instead of liquidation as the issues of liquidation have already harmed the country’s financial sector, said industry insiders.
In June 2019, the government directed the central bank to liquidate PLFSL due to the deterioration of its financial health in the last several years.
PLFSL is one of the four NBFIs from which rogue banker Proshanta Kumar Halder, also known as PK Halder, swindled at least Tk 3,500 crore.
On June 27 of that year, the finance ministry instructed the central bank to shut the NBFI for its failure to improve its conditions.
It was the first liquidation process in Bangladesh’s financial sector in line with the Financial Institutions Act, 1993.