Overseas remitting system shaken: Million-dollar scam: Corrupt people close to past political regime involved

Overseas remitting system shaken: Million-dollar scam: Corrupt people close to past political regime involved
By Pulack Ghatack
Tue, 3 Jul 2007, 13:37:00

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The million-dollar scam of First Solution Money Transfer Limited has shaken the overseas money remitting system and credibility of the entitled institutions. People are also raising questions about the surveillance mechanism of the governments and the central banks of Bangladesh and the United Kingdom.

Some sources on Monday said that certain corrupt people close to the last political regime in power were involved in business with First Solution Money Transfer Ltd.

They said that move was taken during the previous government to close down Sonali Exchange, the foreign currency collecting branch of the Sonali Bank in London to facilitate growth of money transfer companies in the UK. But the information is yet to be confirmed, for Bangladesh Bank and the authorities of eight other banks, which were involved in business with the fraud company, do not know who the owners are. When asked, Bangladesh Bank officials could not confirm the names of the people involved. Then, what was the basis of their trust in establishing drawing arrangements with the fraud company?

"We want business. Bangladesh High Commission in London recommended the company to establish drawing arrangements. Bangladesh Bank also gave permission after checking their documents. Then where is our fault?", replied a mid-level executive of a private bank on condition of anonymity.

Bangladesh Bank permits banks in Bangladesh to establish drawing arrangements with foreign banks and exchange houses to facilitate remittance by Bangladeshi nationals living abroad.

Persons willing to remit their earnings through official channels can buy either Taka draft or US dollar draft from these foreign banks and exchange houses having drawing arrangements with different banks in Bangladesh.

With this arrangement, Bangladeshi nationals living abroad can send foreign exchange directly to their own bank accounts or to their relatives' bank accounts in Bangladesh.

Questions are, however, being raised about the credibility of Bangladesh Bank about giving permission to any bank to establish drawing arrangements with foreign banks and exchange houses.

People are now questioning about the difference between the "hundi" and the so-called legal money supply of accredited companies. If a criminal gang forms a company and starts to transfer legal or illegal money, will the banks get involved in business with it without verifying its credibility? "How could the central bank allow banks to establish drawing arrangements with a company without having enough information about it?," a host of people told the New Nation yesterday.

Globally, some 86 institutions including the foreign branches of Bangladeshi banks are involved in money transfer to Banladesh. A total of 38 institutions including four branches of Sonali Bank are engaged in money transfer from the UK.

Of those, First Solution maintained relationship with the highest number of Bangladeshi banks. The fraud company remitted money through eight Bangladeshi banks including Uttara Bank, Eastern Bank, National Credit and Commerce (NCC) Bank, SouthEast Bank, Mutual Trust Bank, BRAC Bank Limited, Prme Bank and Islami Bank.

The firm claimed itself as one of the biggest Bangladeshi money-transferring firms in London. They had 42 branches in different cities. But, all the branches were suddenly closed down on Thursday last.

It was also involved in business like travel services, Hajj and Umrah services, property finance, business loan, personal loan, general insurance, tax consultancy, pensions etc. It lured people offering higher profit in the name of religion terming it "Islamic finance" and "Shariah Compliant Investments."

"We are committed to providing Shariah compliant products and services to all our clients. As part of our vision, we want to be at the forefront in encouraging more and more British Muslim Women to become successful entrepreneurs through participation in First Solution Investment Projects such as property developments as individuals or in groups," says the website of the fraud company.

Reports received from London revealed that the expatriate Bangladeshis living in the UK sent 9 million pound sterling worth Tk 126 crore to Bangladesh through the company during the last six weeks.

Meanwhile, UNB reports that Bangladesh Bank has asked Bangladesh High Commission in London to take up with the British authorities the remittance scam by UK-based First Solution Money Transfer Ltd that allegedly misappropriated huge money sent by NRBs.

"We wrote a letter to the High Commission in this regard today," Bangladesh Bank Governor Dr Salehuddin Ahmed told reporters Tuesday.

"They (the remittance house) are not under our supervision. The UK authorities gave them license to operate," he said after a function at the auditorium of National Press Club.

He was addressing a function marking the distribution of stipends among meritorious students by Islami Bank Foundation.

Replying to a question, he said the commercial banks here would pay the beneficiaries from their covered funds. "Later, we'll see what we can do in this regard."

The company, which had money transfer arrangements with the local banks, reportedly closed down all of its branches immediately after misappropriating the huge amount of money remitted by the expatriate Bangladeshis living in the UK.

They advised the local commercial banks to send the money to the beneficiaries but did not post the remitted money for the banks.

A senior Bangladesh Bank official told UNB that the High Commission has already started collecting relevant documents for sending the remittance from the expatriate Bangladeshis in UK and they would take up the problem with the UK authorities for its settlement as per UK's legal provisions.

"Otherwise, we'll look for a satisfactory solution locally," he said, adding that the remitted money, if necessary, should be given from the profits of the banks concerned.

He said Bangladesh Bank has also launched an internal investigation whether the commercial banks had proper agreements with the remittance house for transaction or the agreements had any discrepancy. "Bangladesh Bank will take action after examining the documents," he said.

To avert future problems related to remittance, Bangladesh Bank has decided to publish ads in newspapers urging people not to make transactions with fake exchange houses.

The central bank would also formulate a policy to regulate the local exchange houses to avert future problems relating to wage earners' money.

Meanwhile, Bangladesh Bank executive director Yasin Ali summoned senior executives of the commercial banks involved and had case-to-case talks with them in this regard.

The central bank convened the meeting as part of its investigation into the alleged misappropriation of remittance. It has so far detected an amount of Tk 18 crore remitted from the United Kingdom that remained to be disbursed among the recipients in Bangladesh by the local commercial banks.

Of the amount, South East Bank alone is responsible for Tk 14 crore as reported at a meeting between the Bangladesh Bank and eight commercial banks at the central bank's conference room on Monday.