Bismillah Group Scam and Banking Sector Corruption Uploaded by Jakir_bnk on Dec 19, 2014 & Oratings * 2K views * 18 pages Document Information This document is based on Bismillah group corr. & Download now 1. Introdu Bismillah Towels Team (BTG) launched its journey within 1988 that has a vision of becoming one of the most recognized hand towel and home textile manufeeturer on the state simply by offering the best mixiure of top quality and productivity, BTG features broadened its potential, developed a skilled managing group along with effective labor force, and integrated superior engineering to be remembered as throughout the world reasonably competitive. ‘They are dedicated to provide top quality merchandise within reasonably competitive price tag. In over twenty years connected with small business practical knowledge, BIG features accumulated tremendous status at your home and in foreign countries. Revolutionary small business approach, experience, durability, top quality peace of rmind and superior solutions happen to be your components of our achievement, ‘The group is particularly inside the output regarding all sorts of terry shower towels, terry bathtub robes, terry made-ups, kitchon's shower towels in addition to the other entire terry in addition to non-terry at the same time house linen items, using the requirements individuals appreciated consumers. BTG is usually toully designed with new looms, point out regarding v1. Introduction: Bismillah Towels Team (BTG) launched its journey within 1988 that has a vision of becoming one of the most recognized hand towel and home textile manufacturer on the state simply by offering the best mixture of top quality and productivity. BTG features broadened its potential, developed a skilled managing group along with effective labor force, and inte; ated superior engineering to be remembered as throughout the world reasonably competitive. They are dedicated to provide top quality merchandise within reasonably competitive price tag. In over twenty years connected with small business practical knowledge, BTG features accumulated tremendous status at your home and in foreign countries. Revolutionary small business approach, experience, durability, top quality peace of mind and superior solutions happen to be your components of our achievement, The group is particularly inside the output regarding all sorts of terry shower towels, terry bathtub robes, terry made-ups, kitchen's shower tawels in addition to the other entire terry in addition 0 non-terry at the sume time house Linen items, using the requirements individuals appreciated consumers, BTG is usually totally designed with new looms, point out regarding artwork technological innovation structured dyeing sections along with twenty four hours power copy coming from your own in-house machines. All of their machineries are usually run through highly skilled staff. Each of their items are usually excellent sufficient in order to meet the customers can use regarding their particular craftsmanship, hand really feel, high absorbency, longevity, shade fastness in addition to pattems, They've got the actual expertise in addition to facilities to supply superior selection of 100% cotton in addition to blended thoroughly items along with different sizes, GSM, patterns in addition to shades. They are working relentlessly to expand their business through high ethical standards and being socially responsive. Keeping this in mind, they are setting off a new venture dedicatedly on modem and exclusive home textile for great fashion for each home, They are always in the quest of professionalism and perfection characterized by a continual pursuit for innovations and a focus towards nurturing lasting customer relationship.2. Objective of the Report ‘The objective of the report is to familiarize ourselves with the real market situation, to ‘compare them with the business’ theories & atthe last stage make a report on assigned task. The main objective of this repott is to have an assessment on Bismillah Group fiauding activities. We tried our best to know how Bismillah nap involved in fraud aetivities& the bank's fault regarding this issues.In addition, the study secks to achieve the following objectives: + Topresentan overview of Bismillah Group + Toseview the present position of Bismillah Group + To find out seme problems which ave facod by particular bank + Todetermine the tors tha 8 responsible for frauding + To familiarize with practical loan Environmet + To have an exposure on Joan providing system in banking sector of Bangladesh + Toolate the theories of banking with the practical banking activities + Toidentify the problems facing by particular Banks + To suggest remedial measure for proving loans in banking sectors 3. Methodology 3.1 Study Desiga The report was fully investigative in internet based. Data have been collected from secondary 3.2 Data Collection This study is mainly based on secondary data available from the various divisions and departments of particular group and Bismilla Group, in addition to these other necessary information have been collected from the daily newspapers, relevant journals, annual reports ‘of Banks, Bangladesh bank and Bismillah Group have also been taken into consi tion, 21Pa3.3 Secondary sources of dats. = The website of Bismillah Group = Different news papers + Different papers of selected Banks = Unpublished data = Different text books 3.4 Limitations The present study was not out of limitations, But a student, it was a great opportunity for us to know the banking cctivities of Bangladesh specially JanataBank, Jamuna Bank, Shahjalallstami Bank, Premier Bank, Prime Bank. Some restraints are disclosed bellow: = The main constraint of the study is insufficiency of information, which was required for the study. There are various information the bank's employees don't provide due to security and other corporate obligations. = Due to time limitations many of the aspects could not be discussed in the present report = Every organization has their own secrecy that is not revealed to others. While collecting data through intemet, did not provide much information for the sake of the confidentiality of the organization, = We carried out such a study for the first time, so in experience is one of the main constraints of the study. 4. Vision of Bismillah Group To become one of the apex companies in the eyes of both customers and employees and making great strides in every comer of the world by 2020 through congenial work environment, innovative product variety and social commitment 3|Page NED MLS X|5. Mission of Bismillah Group + Thriving w become the market leader through quality products, efficient and professional workforce + Pursuing continuous growth to fulfill the aspirations of customers, employees and stakeholders. + Approaching current and fiture issues with a sense of faimess, enthusiasm and creativity in terms of products and work atmosphere, 6. Quality Assurance BTG maintains strict quality control practices to determine that all the goods are of high standard. Extensive use of total quality methods contributes greatly (o mest the standard set by the Group. Quality control processes are setup at every stage of production with stringent standards to ensuring the highest quality. The quality control personnel catry out pre- inspection of products at different stages to maintain standards and 10 find out defective products. Quality Assurance in BTG takes place in three layers Firstly, On line quality checking by weaving, dycing and finishing section Inspection team in each slage of production Secondly, Completely independent professional Quality Control team under the dircetion and supervision of production Director on a daily basis. Finally inspeetion by the highly qualified Quality Control Team of the Head Office under the guidance of DMD as per the order. + High quality of open end, ring spun and combed yarn from own factories. + Environment friendly Best quality dyes and chemical imported by own resources. ‘+ Ensuring the quality by testing outside in the standard laboratory on a regular basis, a[PageBismillah Group’s Concerns The group concems the following sister groups. These are described in brifly 7.1 Bismillah Towels Limited This unit has 160 Brand new Shuttle Loom in operation, Soft Flow Dyeing, 200033 sft floors for finishing operation. This unit is also furnished with ETP (Chemical) - 20 meter cube in ‘operation. Ata glance © Location: Comilla + Towel Weaving Section 100 Shuttle Looms ar in operation Production Capacity - $800 ke’day Dyeing Capacity 7500 kgiday Stitching: 2000 x3 sft floors are in operation Products: All ype of tery towel (From 300-650 GSM) 7.2 HindulWall Textile Lid Hindul Wali Textile Lid is exelusively 100% export oriented tery and non terry towel ‘manufaetuser was established in the year 1988, This unit is equipped with modera Looms and machines. Hidul Wal is situated in BSCIC ca near Comilla Export Processing Zone. Ata glance + Towel Weaving Section 2 100 Shuttle Looms are in operation Production Capacity - 4300 kg/day + Towel Dyeing Section Production Capacity - 6000 kg’day ‘+ Stitehing: 2000 x3 sft floors are in operation SlPese+ Products: All type of terry towel (From 300-650 GSM) 7.3 Alppa Composite Towels Ltd Alppa Composite Towels Lid, a part of Bismillah Towels Group, is comprised of Weaving Unit, Dyeing Unit, Washing Unit and Finishing Unit, This unit is located in Polasht Savar ncar Dhaka. Alppa Composite Tewels Ltd is the footstep of composite towel business of the group from where quality assurance priority and customer's satisfaction level keeps on ing which is the most chriving part of the business of the group, Location - Savar, Dhaka = Towel Weaving Section 200 Shuttle Looms are in operation + Production Capacity - 10,000 Ky/Day = Towel Dyeing Section Dyeing Capacity = 12000 kglday Stitching - 3000x4 sft floors are in operation ‘= Products: All type of terry towel (From 300-650 GSM) 7.4 Sehreen Teville Industries Ltd Sehreen Textile Industries Lid is situated at Debpur, Comilla, This unit is meeting the requirement of customers with quality products, Ata = Lecati opur, Comilla Towel Weaving Section (© 50 Shuttle Looms are in operation Production Capacity = $400 Kg/Day = Towel Dyeing Section 6 [PoeDycing Capacity = 4000 kgiday + Stitching - 100 x 4 sft floors are in operation + Products: All type of terry towel (From 300-650 GSM) 7.8 Saharish Composite Towel Ltd Ata glance: + Location = Sreepur, Gazipur + Towel Weaving Section 80 SMIT Rapier Looms with production capacity of 18,000 ky/day 20 SMIT Rapicr Looms with Jacquard the production capacity of 3 500 kaday + Towel Dyeing Seetio Solid Dying (Soft Flow technology) with capacity of 20,000 kg/day Continuous Towel Printing (Flat and rotary system) with capacity of 20,000 kyiday Shearing Towel production capacity — 20,000 kyday + Yarn dyeing (Cone dyeing technology) - 5,000 kgiday + Bed Sheet Section 250 Picanol Omni Airjet looms 50 Picanol Omani looms with dobby Production Capacity ~ 80,000 miriday ‘Wider width arrangement with pigment and reactive printing facilities and solid dying, + Stitehing - 150,000 sft in four floors Products: All type of terry towel (From 300-650 GSM) 7.6 Afros Spinning Mills Ltd Located in Gazipur, Afros Spinning Mills (Pvt) Lid is a efficient source of yarn for producing towels, For the meeting of requirement of raw materials, this unit was added with BTG operation on 2010. Ata glance Location = Gazipur 7p"Machinery Installed - 10 Rotor * Production Capacity - 250 Ton’ Month 7.7 Bismillah Cargo Express To facilitate and support increased cxport-clated sctivitics, Bismillah Cargo Express (BCE) has been established. A modern fleet of vans is eny ‘materials to the factories and finished products from the factories for shipment, Bismillah iged in transportation of raw- Cargoes are equipped with tracking system for easy localization, Fleet: + Cargo7 Ton (Ashok Levland) = 08 + Cargo 7 Ton (Tata TC) 0 + Cargo 7 Ton (Bedford) ~ 250 TowMonth = 08 + Cargo3 Yon (Eicher) - 0 + Cargo LS Ton (Teyota-Dyna) - 250 Ton/Month - 02 + Tratler - 250 Ton/Month - 04 BIG Holdings Ltd and Progressive Overseas Ltd arc under construction, Ad closed by Googleabs Figs 3!) Gen Sal | 91 Page Vo FOO Enjoy millions of ebooks, audiobooks,9. Involving Banks of Bismillah Group ‘The renowned company Bismillah Group had conducted their business transaction with several banks. Recently it involved with a swindle of these banks. The information regarding those banks is described in briefly. 9.1 JanataBank Janata Bank Limited, one of the state owned commercial banks in Bangladesh, has an authorized capital of Tk. 20000 million (approx. USS 250 million), paid up capital of Tk. 11000.00 million, reserve of Tk.17234 million. The Bank has a total asset of Tk. 508567 million as on 31” December 2012, Immediately after dhe emergence of Bangladesh in 1971 the erstwhile United Bank Limited and Union Bank Limited sere renamed as Janata Bank. On 18" November, 2007 the bank has been corporatised and renamed as Janata Bank Limited. ‘Janata Bank Limited operates through 892 branches including 4 overseas branches at United Arab Emirates. I is linked with 1202 foreign correspondents all over the world, The Bank employee"s more than 15 ) thousand persons, ‘The mission of the bank isto aetively participate inthe Socio- economic development ofthe nation by operating a commercially sound banking organization, providing credit to viable borrowers, efficiently delivered ‘and competitively priced, simultaneously protecting depositor's funds and providing a satisfactory return on equity to the owners ‘+ The Board of Directors is composed of 13 (Thirteen) members headed by a Chairman, The Directors axe representatives fiom both public snd Private sectors, The Bank is headed by the Chief Executive Officer & Managing Director, who is a reputed banker. + The corporate head ollie is located at Dhaka with 10 (ten) Divisions comprizing of 38 (thirty eight) Departments to|Pase 1G O0% © SCRIBDGeneral Credit Line of janata Bank: financing business, rade and industrial activities through an effective livery system. Janata Bank Limited offers eredit to almost all sectors of commercial activities hav 1g productive purpose, © The loan portfolio of the Bank encompasses a wide range of credit programs covering about 200 items narked by the Credit is also offered to 15 (Fffeen) thrust sectors, as Government, ata reduced interest rate to develop frontier industies, © Credit facilities are offered to individ ls, businessmen, small and big business houses, traders, mam tures, corporate bodies, et, Loan is provided to the rural people for agricultural production and other offsarm activities, > Loan pricing system is customer friendly © Prime customers enjoy prime rate in lending and otic scrvices. Quick appreciation, appraisal, decision and disbursement are ensure Credit facilites are extended as per guide-lines of Bangladesh Bank (Central Bank of Bangladesh) and operational procedures of the Bank however, change fiom time to time depending on the level of competition in the financial sector. 9.2 Prime Ban In the backdrop of economic liberalization and financial sector reforms, a group of highly successful local entrepreneurs conceived an idea of Hoating a commercial bank with different outlook. For th m, il was competence, excellence and consistent delivery of reliable serviee with superior value products, Accordingly, Prime Bank was created and commencement busine started on 17th April 1995. Thi sponsors are reputed personalitios in the ficld of trade and commeroe and their stake ranges from shippi 0 textile and finance to energy ete As a filly licensed commercial bank, Prime Bank is being managed by a highly professional and dedicated team with long experience in banking. They constantly focus on understanding 11) Ftd CO EN Eland anticipating eustomer needs. As the banking scenario undergoes changes 80 is the bank and it repositions itself in the changed market eondition Prime Bank has already made significant progress within a very short period of its existence, The bank has been graded as a top class bank in the country through intemationally accepted CAMELS rating. The bank has already occupied an enviable position among its competitors after achieving suocess in all arcas of business operation, Prime Bank offers all kinds of Commercial Corporate and Personal Banking services covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by our central bank. Diversification of products and services include Comporate Banking, Retail Banking and Consumer Banking right from industry to agriculture, and real state to software. Prime Bank, since its bewinning has attached more importance in technology integration. In order to retain competit edge, investment in technology is always a top agenda and under constant focus. Kecping the network within a reasonable limit, our strategy is to serve the customers through capacity building across multi-delivery channels. Our past performance es an indication of our strength, We are better placed and poised (0 take our customers through fist changing times and enable them compete more effectively in the market they operate 9.3 Jamuna Bank Limited Jamuna Bank Limited (BL) is « Banking Company registered under the Companies Act 1904 of Bangladesh with its Head Office currently at ChiniShilpaBlhaban, 3, Dilkusha C/A. Dhaka-1000, Bangladesh. The Bank started its operation from 3rd June 2001. The Bank provides all types of support to trade, commerce, industry and overall business of the country-The only Bengali named 3rd generation private commercial bank, was established by 2 group of local entreprencurs who are well reputed in the field of trade, commerce, industry and busine of the country. The Bank offers beth convention and Islamic banking through designated branches. The Bank is being managed and operated by a group of highly educated and professional team with diversified experience in finance and banking. At present the Bank has real-time Online banking branches (of both Urban and Rural areas) network throughout the country having smart IT-backbone. Besides traditional delivery points, the BI Peke Access the ultimate library = with Scribd.bank has ATMs of its own, sharing with other partner banks and consortium throughout the country. ‘+ Having business for at least 2 years in the same line. + Age Limit: 20 years to 60 years. 9.4 The Permlcr bank Limited The Premicr Bank Limited is incosporated in Bangladesh as banking company on June 10, 1999 under Companies Act.1994, Bangladesh Bank, the central bank of Bangladesh, issued banking license on June 17, 1999 under Banking Companies Act. 1991. The Head Office of The Premier Bank Limited is located at Banani, onc of the fast growing commercial and business areas of Dhaka city. It is a scheduled Commercial Bank incorporated on June 10. 1999 as Public Limited Company under companies act, 1994 and Bank companies act, 1991. ‘The Bank has clear vision towards its ultimate destiny - 10 be the best amongst the top financial institutions, © To be the most caring and customer friendly provider of financial services, creat 1g opportunities for more people in more places. + To ensure stability and sound growth whilst enhancing the value of shareholders investments ‘© To aggressively adopt technology at all levels of operations to improve efficiency and reduce cost per transaetion, ‘© To ensure a high level of transparency and ethical standards in all business transacted by the Bank. + To provide congenial atmosphere which will attract competent work force who ‘will be proue! and eager to work for the Bank. ‘© To be socially responsible and strive 10 uplift the quality of lif by making effective contribution (© national development. BlPage9.5 Shahjalalfslami Bank Limited Shahjalallslami Bank Limited (SIBL) commenced its commercial operation in accordance with principle of Islamic Shariah on the 10th May 2001 under the Bank Companies Act 1991, During last twelve years SHIBL has diversified its service coverage by opening new branches at different strategically important locations aeross the country offering various service produets both investment & deposit. Islamie Banking, in essence, is not only INTEREST-FREE banking busi ss, it carries deal wi business product therebs erating real income and thus boosting GDP of the economy. Board of Directors enjoys high credential in the business arena of the country, Management Team is song and supportive equipped with excellent professional knowledge under leadership of a veteran Ranker Mr Md, AbdurRahmanSarker: StrategiesofShahjalallslami Bank Limited 9. To strive for customers best satisfaction & carn their confidence To manage & operate the Bank in the most effective manner © To identify customer's needs & monitor their perception towards meeting those requirements © To review & updates policies, procedures & practices to enhance the ability to extend better serviees to the customers. © To train & develop all employees & provide them adequate resources so that the customers’ needs are reasonably addressed, © To promote organizational efficiency by communicating company plans, polices & procedutes openly to the employees in a timely fashion © To cultivate a congenial working environment ify portfolio both the retail & wholesale markets, 14|Page10. Swindlingof Bismillah Group 10.1 Fraud of Bismillah Group Bismillah Group, @ terry towel producer, allegedly swindled Tk 1,100 crore from five commercial banks showing fake documents. Earlicr,Anti-Corruption Commission (ACC)asked Bismillah Group chairman NowrinHasib and its managing director KhajaSulaiman Anwar to be present at the ACC head office to face grilling on May 8, 2013. But, they did not appear before tie commission as they were said to have fled the country. As the two top officials of Bismillah Group went into hiding, the probe report will be prepared \without questioning them, the ACC inquary officer said, on February 26, the anti-graft body formed a five-member inquiry team to probe the alleged plundering of about Tk 1,100 crore . According to a Bangladesh Bank report, Bismillah Group swindled about Tk m state. 1 Janata Rank and four private commercial banks Prime Bank. Shahjalal Bank, Jamuna Bank and Premier Bank—showing fake export documents, taking government's cash incentive to open business firms abroad and with accommodated bills through Letters of Credit (LCs). The business group swindled Tk 392.57 crore from Janata Bank, Tk 306.22 crore from Prime Bank, Tk 163.69 erore from Jamuna Bank, Tk 148. crore from Shahjalal Bank and Tk 62.97 from Premier Bank: The following pie chart shows the percentage of loan swindled by Bismillah Group: ss sanata Bank = Prime Bank ‘= amuna dank = Shahjelal Banke ‘= Premier@ank 15|Page HARVARD Kennedy School Public Leadership Credential10.2 Reason behind Fraud ‘The possible reason of Bismillah Group's feaud arc identified as follows ~ adesh Bank over the banks + Lack proper of monitoring and controlling of Bang ‘Internal links / relationships are set up between the particular Bank and the Group © Political intervention over the banks + Misuse of power of employees of the particular banks + Lack of proper collateral © Proper investigation before providing loans 10.3 The Role Bank’s Official Regarding Fraud fore preparing the probe reper, the inquiry committee examined documents ofall the five banks and quizzed around 70 of their officials. The controversial group swindled the money with the help of bank officials between June 2011 and July last year mostly through LTR inst trust receipt) using names of fake foreign buyers and forged documents, the enquiry revealed. Rorrowers usually do not need to put their property as collateral to get loans from banks through LTR as such loans are given on trust provided that some documents are submitted, suid ACC investigators. But Bismillah Group along with its several sister concerns Shaharish Composite Factory Ltd, Alpha Composite Towel Ltd, Shabarish KT Led. HindulWali Ltd and Bismillah Towel Lud resorted to embezzlement. 10.4Action against Bismillah Group The Anti-Corruption Commission (ACC) has filed 12 cases against Bismillah Group for allegedly embezzling Tk 11 billion ftom five banks.The anti-graft watchdog has found evidence of money-laundering to the tune of Tk 11.74 billion from the banks using fake docume Tk 11.74 billion from t Prime Bank, Premier Bank, JamunaBank and Shabjalalslami Bank The antiegralt watchdog has found evidence of money-laundering to the tune of banks using fake documents. The banks involved are Janata Bank, The Anti-Corruption Commission (ACC) in the 12 eases have accused 13 people from Bismillah Group and 40 officials from the five hanks for graft and money-laundering, ACCDeputy Director Sy ed IqbalHHossain said that according to the records, the company’ took Tk 2, showing fake documents. 11.74 billion from the five banks between 2006 and July, 20 The Bismillah Group officials accused in the cases are— + Bismillah Towel Lid Managing Director KhwazaSoluiman Anwar Chowdhury + Chainman NawrinFasib + Directors Safigul Anwar Chowdhury, Abidallasib, Nahid Anwar Khan, KhandskerMoinuddin Ashraf, SarwarJahan + DMD Akbar Aziz Mutaki + Manager Riazuddin Ahmed * Bismillah Group's sister concem Network Freight System Ltd Chairman Aktarffossain + Proprietor of TW Express MdMoinuddin + Bay Yam LtsGolamMohiuddin Ahmed + However all the accused except Akbar Aviz Muttaki are currently abseonding +The remaining 40 accuse are the officials from the five banks Earlier, ACC asked Bismillah Group chairman NowsinHasib and its managing director KhajaSulaiman Anwar to be present at the ACC head office to face grilling on May 8. But, they did not appear before the commission as they were said to have fled the country. 10.5Possible penalty against Bismillah group In this part, we recommend some penalty against Bismillah Group duo to fraud, + Under the antismoney laundering act, the accused may get up to 10 years in prison and their moveable and immovable properties might also be conti +The Bismillah g+ The assets of the group should be confiscated by govt + The involved bank officials should be fired from the particular banks Recommendation Now a days, different kinds of bank's fraud are seen everywhere in our country, Bismillah Group did one kinds of these frauds. But it should be stopped, According to our opinion, we recommend some preventive actions to reduce such kind of frauds. ¥ Proper monitoring of Bangladesh Bank should be ensured ¥ Verify the collateral and proper document before providing loan ¥ In case of providing loan, illegal activities of bank's emplayce should be controlled by the bank authority ¥ There should not be any type of political enforcement ¥ Alltype of organizational ethies should be followed by organization ¥ Ifany organization involve in illegal activities, it should be highly punished ¥ The Govt. should handle such kind of bank's fraud Conclusion The 1B [Page