Destiny Cooperatives Society
Tk 1,450cr anomalies detected
The Department of Cooperatives (DoC) has detected financial irregularities of around Tk 1,450 crore in the operations of Destiny Multipurpose Cooperative Society Ltd (DMCSL), cash-cow of the controversial Destiny Group. The DoC unearthed the irregularities — misuse of funds, unauthorised expenditures and investments, recruitment of members, commission and overvaluation of assets — through an investigation that took about four months.
The report has been submitted to the Ministry of Local Government, Rural Development and Cooperatives on Sunday, confirmed Amiya Kumer Chattapadhay, additional registrar and head of the probe committee.
DMCSL’s major financial irregularity that the probe has detected is: unauthorised spending of over Tk 740 crore for the distributors of Destiny-2000 Ltd as commission to collect new members.
The DMCSL management also lent Tk 270.52 crore to non-members and invested Tk 120.63 crore in other entities, all of which are non-profitable organisations. The cooperative wing of the Destiny Group also caused a loss of Tk 74.81 crore in buying floor and space in Diamond Diplomatic Tower at Kakrail.
Other financial irregularities by DMCSL include Tk 11.39 crore additional spending for making certificates from abroad ignoring those in the domestic market and nearly Tk 4 crore spending for Destiny Group, which is a separate entity.
Besides, Irfan Ahmed Sunny, former treasurer of DMCSL, illegally took more than Tk 21 lakh as honorarium.
The non-financial irregularities found by the DoC are: enrolment of fake members and concealment of information about investments in other entities.
According to the probe report, DMCSL enrolled at least 30 percent members in the shareholders’ list without any proper address, which the DoC believes had been done to show a massive growth rate to its existing and would-be members.
The DMCSL had only 167 members in 2006-07, but it rose to 6.40 lakh in 2010-11 and nearly 8.5 lakh in 2011-12.
“Out of 8.5 lakh DMCSL members, 30 percent have no real addresses,” said the report.
DoC documents show that the DMCSL had applied to the cooperatives authority in the fiscal year 2011-12 for permission to invest more than Tk 394 crore in 34 entities. The proposals included purchase of Best Aviation and Alpana Chhayachitra for Tk 132 crore.
But the DoC found that it (DMCSL) had already invested Tk 251 crore in 27 entities out of 34 in 2010-11. But Destiny sought permission a year after making the investments, which was a gross violation of the law, mentioned the probe report.
According to the law, a cooperative society must take prior approval from the DoC for an investment exceeding Tk 5 lakh.
DoC investigation also found that most of the entities where DMCSL invested exist only in paper.
Destiny had overvalued its assets to stimulate its books of account. An asset, which had been bought with Tk 55 crore, was shown worth Tk 77 crore after a year.
The top management of Destiny also cheated people with its tree plantation programme. The DoC report found that a package for tree plantation programme had been offered at Tk 10,000 in condition that half the amount would be paid by customers while the rest by DMCSL.
“But in reality DMCSL paid nothing,” according to the report.
Over the past few months, Destiny Group came under the spotlight following a Bangladesh Bank enquiry that found proof of illegal banking by DMCSL.
It was creating disorder in the country’s financial sector, said the BB probe report, which prompted different government agencies, including the DoC, to carry out the investigation against Destiny Group.
After a two-month investigation, the Anti Corruption Commission had sued 22 top officials of Destiny Group, including its chairman Rafiqul Amin and director Lt Gen (rtd) M Harunur Rashid for money laundering.
Obtaining registration from DoC in 2005, the controversial cooperative firm had seen an astronomical rise in its capital, shareholders, profit and investment since 2009.
The company’s paid-up capital increased to nearly Tk 300 crore in 2009-10 from Tk 5.53 crore a year ago. The figure jumped to nearly Tk 1,200 crore in 2010-11. DMCSL’s paid up capital was Tk 1.62 crore in 2006-07.
Loans and investments grew to Tk 569 crore in 2010-11 from less than Tk 23 crore in 2008-09; they rose by over 213 percent between 2009-10 and 2010-11.
Rafiqul Amin, chairman of DMCSL, could not be reached for comments.
-With The Daily Star input