Controversial taxman Matiur’s rulings cost govt Tk1000cr in lost revenue

Infograph: TBS

Highlights:

• Former tribunal chief Matiur accused of massive Tk1,000 crore corruption
• Allegedly favored companies in tax evasion cases during tribunal tenure
• High Court reviewing 21 verdicts; ACC launched criminal investigations
• Matiur, wife arrested; assets worth nearly Tk1,000 crore uncovered
• Issued controversial ruling favoring steelmaker's customs duty under-invoicing scheme
• Built vast wealth through assets, resorts, stock market "insider trading"

Matiur Rahman, the former president of the Customs, Excise and VAT Appellate Tribunal, who gained notoriety last year following a controversial "goat incident" involving his son, is now at the centre of a sprawling corruption scandal. He is accused of abusing his authority to deliver verdicts that allegedly favoured businesses in tax evasion cases, resulting in what officials estimate a staggering loss of nearly Tk1,000 crore in government revenue.

Bite-Sized: How controversial taxman Matiur's rulings cost the govt Tk1,000cr

The Customs, Excise and VAT Appellate Tribunal is established to recover evaded taxes and duties by resolving revenue disputes. However, the Attorney General's Office alleges that during his brief four-month tenure as tribunal head from 22 February to 23 June 2024, Matiur Rahman did the opposite, systematically ruling in favour of companies accused of significant tax and duty evasion.

NBR sources reveal that Matiur disposed of 270 appeals related to customs and VAT during his tenure, with 84 of these rulings going against the government – which cost the government revenue losses of Tk1,000 crore.

Attorney General Md Asaduzzaman confirmed that the ACC is investigating whether Matiur received illegal advantages from these cases.

High court scrutiny and ACC investigation

Of the scores of verdicts issued by Matiur, 21 rulings, involving revenue claims of approximately Tk300 crore, are currently under the scrutiny of the High Court. The Attorney General's Office, representing the National Board of Revenue (NBR) and the government, has filed cases with the High Court's customs, excise and VAT bench, challenging these "unusually" pro-company decisions.

Sources from the Attorney General's Office and an Anti-Corruption Commission (ACC) investigator indicate that initial findings suggest Matiur handed down these favourable rulings in exchange for illicit benefits from the companies involved.

"As a result, at the NBR's request, we have moved to challenge these verdicts through the High Court," an AG Office source confirmed.

The ACC has already filed four cases against Matiur and his family members, alleging the amassing of illegal wealth worth nearly Tk1,000 crore. Matiur and his first wife have been arrested in connection with these cases and are currently in jail. An ACC investigator stated that Matiur allegedly accumulated substantial wealth through illegal means while serving in various high-ranking positions at the NBR, including as customs commissioner at several ports. An anonymous NBR member corroborated this, stating internal investigations found evidence of Matiur abusing his position and exerting undue influence.

Controversial verdicts and the steelmaker case

A glaring example of Matiur's alleged misconduct emerged just days before his removal. On 12 June 2024, he issued a controversial verdict in a customs duty evasion case involving a leading steel manufacturing company. The company had imported 57,000kg of chemicals, declaring them at a significantly lower value ($3.67 per kg) than the international market price ($6.83 per kg). This discrepancy meant the company declared a value of Tk2.51 crore for materials actually worth Tk4.67 crore, substantially reducing assessed duties. Despite this, Chattogram customs initially cleared the consignment.

When the Chattogram customs commissioner challenged this clearance with an appeal to Matiur's tribunal, Matiur rejected it on 12 June 2024, effectively upholding the company's under-invoiced declaration. The NBR has since filed a writ petition with the High Court to overturn this ruling, and the court has issued a rule asking why the tribunal's verdict should not be declared void.

Assistant Attorney General Zamiul Hoque Faisal, representing the state, confirmed that both the company and the tribunal have been asked to respond, and the case remains unresolved. Sources at the bench indicate that Matiur dismissed at least five more appeals filed by Chattogram and Mongla customs over separate tax evasion allegations against the same company on 11 and 12 June 2024, all of which have been challenged in the High Court. In another instance, Matiur delivered a verdict in favour of a chemical company that allegedly evaded nearly Tk7 crore in customs duties, a ruling also challenged in the High Court.

Matiur's alleged empire of assets

The "goat incident," where Matiur's son attempted to purchase a sacrificial goat for Tk15 lakh, triggered public outrage and exposed the alleged vast wealth accumulated by the former official. Media reports unveiled an astonishing array of properties linked to Matiur, including land plots, apartments, factories, luxury homes, and resorts spanning across several districts, from his hometown in Barishal to Dhaka, Gazipur, Narsingdi, and Feni. While some assets are in his name, a significant portion is reportedly held in the names of his first wife Laila Kanis Lucky, his son, daughter, and various relatives.

Notable assets include Wonder Park, an amusement park in Narsingdi's Raipur upazila linked to his first wife, occupying around 15 bighas of land. Additionally, Apon Bhuban Picnic and Shooting Spot, a sprawling 60-bigha resort reportedly co-owned by Matiur and his wife, boasts various amenities. He is also said to have constructed two luxurious duplex houses – one for each of his wives' families.

Stock market "magic" and insider trading allegations

Matiur also reportedly made significant investments in the capital market, which served as a substantial source of his wealth. He allegedly boasted about his stock market prowess, claiming to have made significant gains even after the 2010 stock market crash. In a television interview last year, he described how his pre-IPO placement shares in Fortune Shoes yielded over six times return in a few years, estimated by analysts to have generated at least Tk150 crore for him and his family.