Hall-Mark Group, which had swindled billions out of the country's largest state-owned bankSonali Bank,will be now allowed to reschedule its loan under the government’s latest scheme for defaulters.
The group have already filed to reschedule its loans and seeking new funds to run business, according to sources.
In April this year, the government unveiled a scheme for loan defaulters to pay off debt.
Subsequently, on May 16, the Bangladesh Bank issued a circular, which said those who were unable to pay but can ‘adequately justify’ their situation will be allowed to pay off the loans with a 2 percent down payment on the loan amount and 9 percent interest over 10 years.
Analysts, however, said that Hall-Mark does not fit in the criteria stipulated in the central bank order.
“Allowing companies which embezzled funds in the scheme will demoralize good borrowers. What the banking sector now needs is good governance, but what’s happening is totally the opposite,” said former governorSalehuddin Ahmed.
Little known Hall-Mark hogged headlines of the national newspapers after misappropriating billionsfrom Sonali Bank in 2013.
It’s managing director Tanveer Mahmud, and its chairman Jasmine Islam had swindled Tk 29.65billion from state-run bank's Sheraton branch between 2009 and 2012 through fraudulent documents.
In 2014, the government had to inject Tk 31.4 billion to the scam-hit bank to keep it afloat.
The state-owned bank is yet to recover a single penny from the group.
Sources confirmed that the business group will be given a deadline to repay the money it swindled and provided that condition is fulfilled, Hall-Mark will be not classified as a defaulter and eligible for new loans.
They said that the Bangladesh Bank has been already ordered to assess the value of Hall-Mark s assets as part of the process to kick off.
“Not a single penny could be recovered by keeping the Hall-Mark managing director and chairman in jail. They can be given a chance to recover the money,” says Zaid Bakht, who heads the board of state-owned Agrani Bank.
According to people familiar with the issue, apart from rescheduling loans, Hall-Mark Group also wants it’s a lift on the freeze of itsTk 6 billion fund in several bank accounts. It also wants access to its further Tk 4 billion frozen accounts to operate business.
The government has already made it clear that it wants the Hall-Mark Group to be back in business.
“You have to believe that Hall-Mark will pay back the money. They will start a business again,” Finance Minister AHM Mustafa Kamal told the media on Sept 4 a meeting of the cabinet committee on economic affairs.
The same day, he held another meeting top Sonali Bank officials, banking division of the finance ministry, and representatives of the Hall-Mark Group to discuss the issue.
“Hall-Mark still has the capability to run their business. We cannot create new businesspeople in the country, rather we will have to patronize the existing ones,” Kamal added.
“I want that they will pay back the bank loan, and live their life smoothly,” Kamal said further.
Hall-Mark started its journey in 2006 by buying just 36 decimals of land from Janata Housing at Hemayetpur. It set up its first factory, Hall-Mark Fashion, on the plot in 2007, the year it started banking with the Sonali branch.
In 2008, the Group set up Boby Fashion, Wall-Mart Fashion, Hall-Mark Style, Boby Denim, and Hall-Mark Design Wear with loans from the state owned bank.
A number of Sonali Bank officials, including its deputy managing directors, were suspended for their alleged involvement in the scam, and are now facing court cases. Hall-Mark Chairman Jasmine and Managing Director Tanvir have been in prison for the last seven years for the fraud.