Govt to form independent board to oversee Nagad operations

The interim government has decided to form an independent board to manage Nagad, the mobile financial service (MFS) provider.

This decision was made today at a high-level government meeting held in the conference room of the finance ministry at the Secretariat. 

Finance Adviser Salehuddin Ahmed said Nagad will be restructured and handed over to a separate independent board. It will no longer be operated by the Bangladesh Bank or the Postal Department – only the independent board will run it.

"All irregularities in Nagad under the previous government have already been identified. Meanwhile, another group suddenly took control of Nagad, despite having lawsuits against them. They will not be allowed into Nagad. The government is taking action against them," he said after the meeting which was chaired by him and attended by Bangladesh Bank Governor Ahsan H Mansur, Special Assistant to the Chief Adviser Fayez Ahmad Tayyab, Attorney General Md Asaduzzaman, and others.

According to the finance adviser, Md Shafayet Alam, who took on the role of CEO at Nagad, must resign as he assumed control illegally.

Bangladesh Bank Governor Ahsan H Mansur stated, "Of course, he (Nagad's CEO) committed fraud. He is guilty and has no right to hold that position. He cannot assume that role."

Meanwhile, the Chamber Court of the Appellate Division temporarily suspended a High Court verdict  that had rejected a writ petition regarding the appointment of an administrator at Nagad on 7 May. The writ was filed by Nagad's independent director Md Shafayet Alam, who submitted the petition on 2 September last year. Despite being a fugitive, he appointed himself as CEO.

Concerns have been raised across the board regarding who currently controls Nagad. Journalists asked whether there is now a dispute over Nagad's ownership between the Postal Department and Bangladesh Bank. The governor replied, "There will be no dispute. Why would the Postal Department cause a dispute? There will be none."

When asked why Bangladesh Bank's lawyer was absent during the court hearing, he responded, "Because Bangladesh Bank was not informed. The petition was handwritten. The official court record differs from what was submitted to us and the Attorney General's Office. The copy we received was not the same – it was handwritten, and not found in our records or at the AG's office."

Bangladesh Bank spokesperson Arif Hossain Khan briefed the media on Saturday, saying those who were managing Nagad fled after the government changed on 5 August last year. Since then, those responsible for running Nagad could no longer be located. 

Given the financial involvement of millions of people with Nagad, Bangladesh Bank appointed an administrator to mitigate risks, and also formed a new board. The absconding officials filed a case, and the court issued an ex parte order suspending the administrator's activities.

The central bank's spokesperson added that an additional Tk650 crore worth of e-money has been created within Nagad without any actual cash backing. This fraudulent act led to multiple violations within the institution, as confirmed by an audit from KPMG. 

The BB governor concluded by saying that a full bench of the Supreme Court led by the Chief Justice will deliver a final decision on the matter today.