The two sent letters to government agencies against one another

A volley of finger-pointing has begun between Mohiuddin Khan Alamgir, former home minister and chairman of Farmer Bank, which has been renamed to Padma Bank, and the lender’s current chairman, Chowdhury Nafeez Sarafat: both allege that the other has misappropriated the bank’s money.

It all started on Sunday, when Alamgir, who is also the sponsor-shareholder of Padma Bank, urged the governor of Bangladesh Bank to investigate an investment of Tk 100 crore in an Alternative Investment Fund managed by Strategic Equity Management owned by Nafeez Sharafat.

The amount disbursed to the company on November 1, 2015 was never paid back in terms of dividend or return on investment, Alamgir said in the letter. Dhaka Tribune has a copy of the letter. 

Besides, the fund was approved at a board meeting in which Alamgir was not present.

The investment was sanctioned in violation of the law that prohibited Sarafat from receiving any investment from Padma Bank as he was director of the bank.

The amount appears to have been unlawfully sanctioned and invested or channelled, which is a gross misuse or misappropriation of the bank’s fund, the letter said.

Therefore, Alamgir urged the central bank to investigate the matter and identify the unlawful users of the bank’s fund and arrange for its return on intimation to shareholders.

Meanwhile, on the same day, Padma Bank sent a letter to the Anti-Corruption Commission (ACC) and the Bangladesh Securities and Exchange Commission (BSEC) inform them about corruption and misuse of power of its former chairman Alamgir.

Alamgir and former audit committee chairman Mahbubul Haque Chisty embezzled Tk 8.33 crore through sanctioning loans to clients to buy City Medical College & Hospital, said the letter signed by Md. Ehsan Khasru, managing director and chief executive officer of Padma Bank.

Dhaka Tribune has a copy of the letter.

Alamgir and Chisty also took bribes from clients for sanctioning loans and were financially benefited, the letter read.

“The loan irregularities and misuse of power for personal benefit were reported in an inspection report of Bangladesh Bank.”

Subsequently, the bank sought the assistance of Alamgir regarding the recovery of default loans amounting to Tk 845.45 crore that was sanctioned in favour of 19 clients in his tenure, the letter added.

‘HE IS TO BLAME’

“Nafeez and his associates are responsible for the bank’s adverse situation,” Alamgir told Dhaka Tribune yesterday.

He went on to categorically deny allegations of misuse of power. 

The bank had some problems in his tenure, but it has been going through serious problems after Sarafat took charge.

He went on to call for an investigation into the matter and identify the unlawful users of the bank’s funds and arrange for the return of money to shareholders.

“The central bank should appoint an administrator to save the bank and the depositors’ money.”

The BB should not have allowed the state-run banks to buy stakes in Padma Bank to rescue it; rather, they should have provided loans to resolve the temporary liquidity problems in the bank, Alamgir added.

But Sarafat also denies the charges levelled against him.

“The bank was empty when I became chairman,” he told Dhaka Tribune yesterday.

Sarafat went on to disown any connection with Strategic Equity Investment, which got the BB licence last year.

However, in the last five years, Padma Bank regularly got more than Tk 12 crore from the investment of Tk 100 crore, he told Dhaka Tribune.

Khasru told Dhaka Tribune that Alamgir was not helping them to recover the default loans.