Don’t liquidate, restructure scam hit People’s Leasing: HC

The High Court (HC) on Monday decided that People's Leasing and Financial Services Ltd – that made the headlines due to PK Halder's financial scam – must be restructured, not liquidated.

After hearing the plea filed by 201 depositors of People's Leasing, the HC bench of Justice Mohammad Khurshid Alam Sarkar passed the order.

"A board will be formed to restructure it as the depositors want the financial institution revived," said Advocate Ahsanul Karim, who represented the depositors.

He said the court in the brief order said a lawyer or a retired judge may lead the board. There could be an auditor and representatives of the depositors in the board too.   

"The court in its written order will let us know who actually will lead the board," he added.  

Ahsanul Karim said the new board will take the necessary measures to recover the loans, and find out eligible investors to take over the charge of the financial institution.

In the last week, 201 depositors filed a petition seeking HC directives for reformation of People's Leasing stating that the Bangladesh Bank can take measures to merge or reform financial institutions since there is no legal scope for liquidating one.

The petition said if decisions relating to People's Leasing are delayed, it will "cause further damage to the depositors".

The operations of People's Leasing were thrown into disarray after Proshanta Kumar Halder alias PK Halder, former managing director of NRB Global Bank and Reliance Finance Ltd, fled abroad after embezzling Tk3,500 crore in loans from several financial institutions, including People's Leasing.

In 2019, the government decided to liquidate the financial institution as it failed to return the money of the depositors. Subsequently, the central bank appointed a liquidator to People's Leasing following a court order.      

Amid the liquidation bid, the depositors moved to the HC, seeking a decision on the fate of the company. As the depositor appealed with the court, the HC in January this year summoned defaulters at People's Leasing with loans of more than Tk5 lakh.

As 122 defaulters did not show up, the HC slapped a travel ban on them. Besides, the provisional liquidator of People's Leasing Md Asaduzzaman was asked to provide the court with the current locations of the defaulters.              

On Monday, Advocate Tajib-ul-Alam represented the Bangladesh Bank while advocate Mezbahur Rahman moved for the provisional liquidator Md Asaduzzaman.