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Bangladesh’s central bank has hired Big Four accounting firms EY, Deloitte and KPMG to conduct an “asset quality review” of banks it says have lost $17 billion to businessmen close to former leader Sheikh’s regime Hasina, said bank governor Ahsan Mansur.
In an interview with the Financial Times, Mansur said the Bangladesh Financial Intelligence Unit had also formed 11 joint investigation teams to track down and recover assets it believes were purchased with the money siphoned from banks, and to to help prosecute those responsible.
Mansur, who was appointed central bank governor by interim leader Muhammad Yunus after Sheikh Hasina fled to India in August, said the investigation would focus on 10 leading Bangladeshi companies, as well as the ousted former leader and her family members.
The governor said the three international accounting firms had already started asset quality assessment. “We will determine how many assets are performing, who is not performing, who took that asset, and at the same time we will conduct a forensic audit,” he said.
KPMG confirmed that its Sri Lankan firm had been contracted to support the investigation. EY and Deloitte did not respond to a request for comment.
Mansur, a former IMF official, has been tasked with helping stabilize Bangladesh’s economy and start the process of recovering what he claims is at least Tk2tn ($16.4 billion) “robbed” from banks during the fifteen years that Hasina and her Awami League party were in power.
In an interview in October, Mansur told the Financial Times that several leading banks had been taken over with the help of the country’s military intelligence, in some cases “at gunpoint.”
He said the asset quality assessment examined six banks, five of which had shares owned by S Alam, a conglomerate led by Singapore-based Bangladeshi tycoon Mohammed Saiful Alam.
“As part of that investigation, the old directors of these banks have been asked to take leave so that quality remains unhindered and asset assessment is not disrupted,” Mansur said.
Bangladesh’s Anti-Corruption Commission this month filed a case against several people, including two of Alam’s sons, accusing them of embezzling Tk11.3 billion in the form of loans. A court in Dhaka has seized several properties in connection with the case.
Alam’s lawyers Quinn Emanuel Urquhart & Sullivan told the FT that he and investors in the conglomerate had “committed no wrongdoing, and they are prepared to take legal action to protect their investments in Bangladesh, if necessary”.
Quinn Emanuel said Alam and the group’s investors “welcome transparency and the application of international standards,” but Mansur’s position was conflicted as the main driving force behind the Yunus government’s task force on banking sector reforms.
Alam’s lawyers, who wrote to Yunus last month warning that they were prepared to initiate international arbitration if they could not resolve their dispute with Dhaka, said that money laundering allegations, and all other allegations, against the businessman and his family were “unfounded”.
The Yunus government has sought international assistance in its efforts to trace and recover funds it claims were taken out of the country, including from Britain’s International Anti-Corruption Coordination Center and the U.S. Treasury Department. The Ministry of Finance is offering technical assistance to Yunus’ advisors as Bangladesh prepares to submit formal requests for legal assistance from other countries.
Bangladesh’s interim leaders this month welcomed the resignation as UK council minister of Tulip Siddiq, a Labor Party MP and Hasina’s niece. They believe this will draw attention to their wider drive to recover lost money.
Siddiq resigned after being named in two ongoing ACC corruption investigations in Bangladesh and facing allegations that she profited from properties linked to her aunt’s Awami League
A spokesperson for Siddiq said this month that no evidence had been provided to support the allegations against her and that she “completely denies the claims.”
Mansur said public pressure had forced Siddiq’s resignation.
“We are encouraged by the response of the international community,” he said. “Politicians are aware of it and hopefully they will face public pressure at home to support this cause.”
Additional reporting by Redwan Ahmed in Dhaka