Hallmark Loan Scam Audit
Report blames Sonali Bank’s delayed probe
A mysterious delay in starting the internal probe into a loan scam of state-owned Sonali Bank had created a scope for the bank to unethically disburse Tk 1,860 crore as loan, said a functional audit report.
Although the bank’s managing director had approved the internal inspection in January this year, the enquiry took until March to commence while its report was submitted in May.
But between February and May, an amount of Tk 1,860 crore was disbursed as loan to Hallmark Group and other entities from the bank’s Ruposhi Bangla Hotel branch, said the functional audit report prepared by Syful Shamsul Alam and Co, a chartered accountant and consultancy firm.
The Sonali Bank board appointed the chartered accountant firm in June to find out those responsible for the scam.
The consultancy firm submitted its report to the bank and forwarded the central bank a copy of the report last week, said a Sonali Bank official.
In May, a central bank investigation revealed massive irregularities in sanctioning and disbursing of loans, especially to little-known Hallmark Group and others, by the bank and instructed it to take necessary actions.
The functional audit report said the top management of the bank had remained “mysteriously silent for a year”, since February 2011, although the signs of irregularities in the branch came to light through various internal inspections.
In 2009 and 2010, an internal inspection team detected gross irregularities in international trade of the branch and submitted a report in February 2011, but the International Foreign Trade Division of the bank did not take any steps in this regard.
Besides, the foreign trade division also did not monitor the abnormal loan disbursement growth, 1,938 percent in some categories, the report added.
The foreign trade division finally raised an office note to inspect the branch office on January 26, 2012 which the managing director of Sonali Bank approved.
“But without any valid reason the inspection team started the inspection after two months. Had the inspection started immediately after the office note, the bank could have saved around Tk 1,860 crore,” the report stated.
Pradip Kumar Dutta, managing director of Sonali Bank, said, “The bank will take proper actions against the people involved in the loan scam on Thursday [today], after discussing the functional audit report in the board meeting.”
According to the audit report, as of May 31 this year, the bank had disbursed Tk 3,699 crore as loan, of which Tk 3,606 crore was disbursed without maintaining banking rules.
The report said the branch manager did not follow the banking rules while sanctioning and disbursing the loans. He had also taken advantage of the loose supervision by the principal and general manager’s offices and the head office. He had adopted unauthorised ways to disburse the huge amount of money as his clients wished.
On the other hand, the report said, the branch officials intentionally refrained from maintaining relevant documents properly.
The top management, including the managing director and general manager’s office, also did not monitor and evaluate the growth in loan disbursement by the Ruposhi Bangla Hotel branch, the functional audit report said.
Rather than monitoring the branch properly, the top management in different times appraised the branch’s activities. The audit report quoted one of the bank’s internal reports that read: “AKM Azizur Rahman is managing the branch efficiently with his extraordinary talent, foresight and banking knowledge”.
Such remark had encouraged the branch manager to go for unethical banking, the report added.
-With The Daily Star input
