Leather sector and fraudulent export
SOME leather companies
have already come under the spotlight in the recent months for their
alleged banking fraudulence by exporting products to some shady
companies in Hong Kong. Indications are that these firms were shell
companies because they actually don't exist at their mentioned addresses
and many of their directors are Bangladeshi citizens, as per a local
daily report on Thursday.
The documents also cast doubts as to whether the exports had actually taken place. The whole scam was done in such a blatant way that even a novice could see the holes in Crescent's deals. Only Janata Bank did not. These firms obtained export LCs from an obscure African bank. The authenticity of the LCs has also been questioned by the BB investigators. The proceeds from the doubtful exports never came to Bangladesh, but Crescent, in collusion with the Janata Bank top officials, took out Tk 684 crore in advance against such exports from January 2017 to February this year, the investigators say.
This is yet another saga of blatant corruption in the banking system. Janata Bank's loan to Crescent Group exceeds 55 percent of its equity capital, when the Banking Act says a maximum of 25 percent can be given. Crescent Group's export bills were not realised yet the bank gave it further loans. Payments in excess of 60 lakhs were found to have been deposited in Janata bank branch manager's account.
In this way almost 1074 crore taka was siphoned off from the government's incentive fund by the Group-- a scam of almost colossal proportions. So in essence the Group took loans from the Bank, faked exports, and then laundered some of the money which it probably got as loans and payment of bills. These financial crimes existed before. The international companies would repatriate profits out of one country to another by showing increased purchase prices for its goods--but Crescent Group has twisted the game entirely to something more twisted.
The current over invoicing involving Crescent Group has overshadowed the earlier fraudulences by an order of magnitude and criminality. We do believe it could not be done without the help of bank.