Why was cenbank, BFIU silent as defaulter Beximco secured more Tk80,000cr loans, HC asks

The High Court today (5 December) expressed shock at how the Beximco Group and its subsidiaries borrowed Tk80,000 crore from various banks despite being in default while the Bangladesh Bank and its Bangladesh Financial Intelligence Unit (BFIU) took no action at all.

The High Court bench of Justice Farah Mahbub and Justice Debasish Roy Chowdhury said this regulatory failure is unacceptable.

Their comments came during a follow-up hearing on a writ petition filed in this regard.

The court also instructed Barrister Masood R Sobhan, the petitioner and lawyer representing the petition in court, to file an application seeking action against the officials of the central bank and BFIU who were involved in approving these loans to Beximco at the time.

Earlier on 4 September, Masood filed the writ petition with the High Court, seeking the appointment of a government receiver to all Beximco Group institutions, as well as court directives for the central bank to recover the loans taken by Beximco Pharmaceuticals Limited founder Salman F Rahman from various banks and repatriate the money he sent abroad.

After yesterday's hearing, petitioner Masood told TBS, "Today [5 December], an affidavit was submitted to the court by the BB that revealed that Beximco had not repaid any money to any bank and was in default. Furthermore, the loans Beximco took exceeded the set limits, with state-owned Janata and Sonali banks being primarily responsible for this."

"Beximco took thousands of crores of taka in loans while remaining a defaulter. Upon seeing this, the court asked BB's lawyer, 'Wasn't BB accountable for the loans disbursed violating the law? It failed to investigate, and to say that the matter wasn't within their knowledge is unacceptable'," said the petitioner.

"BB has not been cooperating with the writ petitioner by providing information about Beximco's loans despite the High Court's previous order to disclose all related details," Masood said, quoting the court.

"Why has the BB not taken any action despite all these irregularities? What did the BFIU do? They should have been fully aware of this," the court said.

"The court then instructed me to file an application against them [BB and BFIU officials]," Masood said. "I informed the court that BB and the BFIU were required to take the necessary remedial actions, as outlined in the law. So, why did they remain silent?"

He said, "What occurred here constitutes a financial crime [loans]...money laundering, another offence, for which criminal cases should be filed. Associated officials of BB and BFIU at the time were partners in Beximco's crimes. I will file an application to initiate criminal proceedings against all the former officials of BB and BFIU."

Following the writ petition, the High Court issued an order on 5 September for the appointment of a receiver in all Beximco establishments. 

Additionally, the court directed the Bangladesh Bank to recover the loans taken by Salman F Rahman from various banks and to repatriate the money he sent abroad.

Subsequently, Beximco Pharmaceuticals filed a leave to appeal with the Appellate Division, seeking a stay on the order regarding the appointment of a receiver. 

The Appellate Division disposed of the leave to appeal and ordered appointment of a receiver to all Beximco firms except Beximco Pharma.