Troubled NBFI People's Leasing calls AGM after six years

Publicly listed People's Leasing and Financial Services Limited, a troubled non-bank financial institution (NBFI), has called its annual general meeting (AGM) after six years, following a directive from the High Court.

In a recent meeting, the company's reconstructed board has scheduled an online AGM on 27 September this year, where its audited financial reports  and dividends for 2018, 2019, 2020, and 2021 will be discussed to secure approval by the shareholders. 

Also, the shareholders will elect the directors of People's Leasing in the AGM. 

In addition, the company published a notice to appoint an independent auditor to audit the NBFI's financial statements for 2022. 

People's Leasing, which commenced operations in 1996, has been reportedly facing a wide range of financial scams since 2004, for which, the Bangladesh Bank appointed an observer at the company in 2015. 

Furthermore, the central bank removed five directors from the NBFI's board in 2015 because of their alleged involvement in the embezzlement of Tk358 crore. 

Yet, the central bank could not restore corporate governance in People's Leasing, and the company's situation kept on worsening. 

Then, the company's liquidation process began in April 2019 after its board informed the Bangladesh Bank about its inability to pay its depositors back after maturity. 

In July 2019, the Dhaka and Chattogram bourses suspended the trading of People's Leasing shares for the interest of investors, according to the stock exchanges. 

But in July 2021, the High Court threw a lifeline to the grappling NBFI by reconstituting its board of directors, thus saving the company from being liquidated. The High Court also issued several directives for the board, borrowers, and the Anti-Corruption Commission to run the company smoothly. 

At the end of December 2018, the company's total deposit stood at Tk2,036 crore and total outstanding loans at Tk1,131 crore. Its defaulted loans were Tk748 crore, which was 66% of total loans, according to the central bank data. 

People's Leasing has been counting losses since 2015. It has not been able to repay depositor's money despite maturity of their funds because it failed to realise money from defaulter organisations.

It got listed on the stock exchanges in 2005. Sponsors and directors of the company jointly hold 23.21% shares. Institutional, foreign, and general investors have the remaining shares of the company as on 31 August.