Nagad administrator’s appointment legal: High Court

The High Court has upheld Bangladesh Bank's decision to appoint an administrator to Nagad, a mobile financial service provider, declaring the move legal and dismissing a rule questioning its legality.

At the same time, the court dismissed the writ petition challenging the validity of this appointment.

The HC bench of Justice Farah Mahbub and Justice Muhammad Mahbub-ul-Islam delivered the verdict today after the final hearing on a rule issued regarding the appointment of an administrator.

Lawyers Jamiruddin Sircar, Mustafizur Rahman Khan, Abul Kalam Khan and Md Jamilur Rahman represented the writ petitioners. Attorney General Mohammad Asaduzzaman, and lawyers Kamruzzaman Kachi and Saiful Islam appeared for Bangladesh Bank.

Lawyer Abul Kalam Khan said the High Court dismissed the petition on the grounds that the petitioners had no legal standing, reports UNB.

When asked whether an appeal would be filed against the order, he said, "A decision would be made after consulting the petitioners."

The central bank's lawyer BM Elias Kachi said, "The judgment mentions that Nagad is an agent of the Post Office. Before appointing the administrator, Bangladesh Bank issued a notice to the Post Office, which responded. Besides, after inspecting Nagad's operations, Bangladesh Bank found irregularities.

"Based on these findings, an administrator was appointed in the interest of its customers. The writ petitioners claimed that no notice was given to them. However, since Nagad is an agent of the Post Office, the petitioners could have applied there if they were aggrieved, but they did not." 

He further added, "Considering these aspects, the High Court dismissed the writ petition, validating the appointment of the administrator by Bangladesh Bank."

Following the formation of the interim government, various changes were made in the management of public and private institutions. 

As part of this process, on 21 August last year, the Bangladesh Bank appointed Muhammad Badiuzzaman Didar, director of the Chittagong Office of the Postal Department, as administrator for Nagad for a one-year term. The previous board of Nagad was also dissolved.

Bangladesh Bank's spokesperson Mejbaul Haque later informed the media that Nagad is a service of the Post Office, and Bangladesh Bank would manage it on their behalf.

However, the Nagad's executive director Md Shafayet Alam filed a writ petition challenging the Bangladesh Bank's appointment of an administrator to Nagad on 10 September, alleging non-compliance with the Payment and Settlement System Act 2024.

The petition made several parties defendants, including the secretary, and director general of the Posts and Telecommunications Division, the Bangladesh Bank governor, the director of its Payment Systems Department, and the appointed administrator.

A week later, the High Court issued a rule, asking why the appointment of an administrator and the reconstitution of the management board should not be declared unlawful.

On 18 December last year, during a hearing on the petition, Advocate Md Saiful Islam, representing the Bangladesh Bank governor, sought a stay on the matter, but the court did not grant it.

Instead, it issued the status quo upon the request of Barrister Muhammad Nawaz Jamir, representing Nagad.

The petition argued that the Bangladesh Bank had violated the Payment and Settlement System Act 2024, which outlines the procedures for appointing an administrator and restructuring the management board.