hallmark group - Dhaka Mirror

Hall-Mark seeks fresh Sonali loan

Admin — Sun, 07 Oct 2012 16:39:13 +0000

Claims it can export garment worth Tk 500cr in 2 months if granted Tk 25cr loan
Controversial business group Hall-Mark has sought a fresh loan of Tk 25 crore from the Sonali Bank, claiming the credit would help it export garment worth Tk 500 crore in two months, said sources in the bank.
Like before, the company provided false and fabricated information relating to its export potentials.
Meanwhile, leading businessmen have questioned how could the Hall-Mark Group, which had exported only $55 million (Tk 448 crore) worth of garments in five and a half years, will be able to export over $60 million (Tk 500 crore) in two months.
“It took 15 years or more for many businesses to export $50 million worth of garments a year. It is absurd for little-known Hall-Mark to achieve that feat,” said Anawr-ul-Alam Chowdhury Parvez, a leading exporter.
According to industry leaders, there are around 150 business houses that export $50 million worth of garments per year from Bangladesh. But it is not necessary for them to own 30-35 factories, though Hall-Mark claims of owning 34 factories.
They said a factory of 40 lines or two factories of 20 lines each can produce and export $50 million worth of garments a year.
A businessman need not own 35 factories to achieve such a target in over five years, mentioned Anwar, also a former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Statistics of Hall-Mark says its total exports were $55 million between early 2007 and May this year.
An investigation by the Bangladesh Bank in May this year detected irregularities in the way the company took out loans of Tk 2,686 crore from the Ruposhi Bangla branch of the Sonali Bank. Since then all commercial banks stopped funding the group.
Banks do not even want to open any Letter of Credit (L/C) in favour of the company, which is imperative to export products.
Tushar Ahmed, general manager (commercial) of Hall-Mark Group, said they started export in 2007 with Hall-Mark Fashion and added six factories in 2008.
During a visit to the Hall-Mark factories at Hemayetpur in Savar in August, Tushar told this correspondent that they have export orders in hand worth only $7 million (Tk 56 crore), a much lower figure than the group cited to Sonali Bank about it export potentials.
Last week he admitted applying for the fresh loans.
Besides his chairman and managing director, Tushar is one of the principal accused in several cases filed by the Anti-Corruption Commission for the loan scam.
Garments exporters, who are in business for more than two decades, are surprised to see how the little-known group with a small export figure was granted the loan in just two years.
Exporters said Tanvir Mahmud, owner of Hall-Mark Group, in the loan documents showed his factories’ capacity many times higher than the reality to deceive the bank and swindle depositors’ money.
According to BGMEA members’ directory, Hall-Mark Denim Composite’s annual capacity has been shown at 3.5 lakh dozen or 42 lakh pieces a year. If a piece is exported at a minimum price of $3, this factory alone can fetch $12.6 million a year.
Yearly production capacities of Hall-Mark Design, Hall-Mark Denim Fashion and Hall-Mark Fashion have been shown 48 lakh, 42 lakh and 54 lakh pieces respectively.
“If these four factories are run on 60 percent capacity, they together can earn $50 million a year from exports,” said Iqbal Hossain, another exporter.
He also suspected many of the Hall-Mark factories are paper-based, but the bank failed to detect that.
“How could Sonali Bank lend such a big amount of depositors’ money to Hall-Mark without checking its production capacity and exports?” questioned Parvez.
Exporters also said to run so many factories, Hall-Mark requires efficient people in its management. But the businessmen do not know any such skilful person in the Hall-Mark’s upper ranks.

-With The Daily Star input

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Shortcut to fortune

Admin — Sun, 30 Sep 2012 16:48:17 +0000

Hall-Mark’s way of building empire with short-term loans
Controversial business group Hall-Mark in wilful violation of banking rules has invested in long-term projects the money it took in short-term loan from state-run Sonali Bank.
The group that began making garments in 2007 now owns 80 factories, at least 40 of which are on paper though. Most of the ones that exist were built with the short-term loans.
Hall-Mark itself is aware that it has done wrong by diverting short-term loans (Inland Bill Purchase-IBP) into project loans, which are long-term in nature, but lender Sonali Bank seemed not to notice it.
“We’ve taken short-term loans for up to 120 days, but invested the money in setting up factories,” said Tushar Ahmed, group general manager (commercial) who is also a close relative of company owner Tanvir Mahmud.
Talking to this correspondent on September 17 at the company’s Hemayetpur project site in Savar, Tusher said, “It takes long to get a project loan. We know the way we’ve utilised the working capital for long-term investments is not proper.”
The project in Hemayetpur, some 30km northwest of the capital, is built on a 100-acre land, a large portion of which was bought with Sonali Bank loan.
Tushar, the key man to deal with banks on Hall-Mark’s behalf, defended his boss’s decision to divert the loan money.
He claimed his company did not siphon off the money; it rather invested in setting up more factories and creating jobs.
According to Hall-Mark, its net liabilities to Sonali Bank stand at Tk 2,268 crore. Of the sum, Tk 1,567 crore is funded loan, meaning the amount has been taken in cash. The remaining amount is non-funded loan, mostly in the form of guarantee against letter of credits (LCs).
The company paid back Tk 400.38 crore to the bank after the lender stopped disbursing new loans to the company in May this year.
A Bangladesh Bank investigation in May found the group’s total liabilities to be Tk 2,686.14 crore.
All of the Hall-Mark loans were against IBP, which is a short-term credit facility utilised as working capital. But the hitherto little-known company used these loans for buying land and building factories.
“We are ready to pay the loans, but our factories must keep on running for that,” said Tushar.
He claimed that they had export orders worth $7 million (about Tk 57 crore) from renowned buyers like H&M, JCPenney and Walmart.
“We cannot export anything as no bank wants to accept our letter of credits now,” he said.
Hall-Mark bought 36 decimals of land from Janata Housing at Hemayetpur in 2006 and set up its first factory, Hall-Mark Fashion, there in 2007, the year it started banking with Sonali Bank’s Ruposhi Bangla Hotel branch.
In 2008, the group set up Boby Fashion, Wall-Mart Fashion, Hall-Mark Style, Boby Denim and Hall-Mark Design Wear with Sonali Bank loans.
There was no factory built in the next two years. But in 2011, it suddenly got hold of a source of money and set up 27 factories that year.
“We’ve invested all loans from Sonali Bank to set up these factories,” said Tushar.
A chief executive officer of a leading private bank said IBPs are a short-term working capital that cannot be used for long-term investments.
“It’s a violation of banking norms and grammar,” he added, preferring not to be named.
The CEO said the way Hall-Mark used the loan money was not viable either because it had to repay the loan within 120 days; but it would not get the return of its investments in two to three years for the nature of the business.
Group Managing Director Tanvir Mahmud did not respond to the phone calls by The Daily Star. He also did not reply to the text messages requesting his comment on such violation.

Courtesy of The Daily Star

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No reply from Hallmak on money refund

Admin — Wed, 19 Sep 2012 11:44:49 +0000

The Sonali Bank decides its next course of action against the Hallmark Group today as the group ignored a notice seeking refund of a half of the money embezzled from
the bank’s Ruposhi Bangla Hotel branch, officials said.
The Hallmark Group embezzled Tk 2,668.38 crore from the branch of Sonali Bank with forged documents.
The Sonali Bank on September 4 issued a letter asking the Hallmark Group to refund Tk 1,334.19 crore in cash by September 18.
Md Hafizur Rahman, deputy general manager of the Sonali Bank, told New Age that the Hallmark Group had not replied to the letter the bank sent till Tuesday, when the
15-day deadline for the refund expired.
He said that the bank would today announce its plan to have the money refunded by the group.
The Sonali Bank board decided to realise a half of the money in cash in 15 days after Hallmark’s managing director Tanvir Mahmud had told the media that his company
had taken 20 times the amount.
The finance ministry on September 10 asked the Sonali Bank to take legal action against the people involved in the misappropriation of money by Hallmark.
The bank, which had not filed a case against the Hallmark Group until September 18, suspended 20 of its officials and made two deputy managing directors officers on
special duty for their alleged involvement in the Hallmark Group’s misappropriation of money.
A Bangladesh Bank investigation showed that the Ruposhi Bangla Hotel branch of the Sonali Bank had lent the Hallmark Group and five other companies Tk 3,606.48 crore
between 2010 and May 2012 on the basis of forged documents.
The Hallmark Group embezzled the money with the connivance of some Sonali Bank officials.

Courtesy of New Age

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Hallmark Group ignores Sonali Bank notice

Admin — Tue, 18 Sep 2012 11:38:51 +0000

Refunding money
Hallmark Group ignores Sonali Bank notice
The Hallmark Group ignored a Sonali Bank notice to refund a half of the money it had embezzled from its branches as the 15-day deadline ends today.
The Hallmark Group embezzled Tk 2,668.38 crore from the branches of Sonali Bank.
On September 4, Sonali Bank issued a letter asking the Hallmark Group to refund Tk 1,334.19 crore by September 18.
The Sonali Bank board decided to realise half of the money in cash in 15 days after Hallmark’s managing director Tanvir Mahmud told the media that his company defalcated 20 times the amount, a senior official of Sonali Bank told New Age on Monday.
The Hallmark Group did not even care to reply, he said.
Asked whether or not Sonali Bank would take any action if Hallmark Group did not comply, he said that the bank would take a decision in this regard today.
On September 10, the finance ministry asked Sonali Bank to take legal action against the persons involved in Hallmark Group’s defalcation of its money.
Until September 17, Sonali Bank filed no case against the Hallmark Group.
On September 13, Sonali Bank managing director Pradip Kumar Dutta said that more time was needed to file criminal cases against the Hallmark Group.
Sonali Bank suspended 20 of its officials and made two deputy managing directors officials on special duty for their alleged involvement with Hallmark Group in the defalcation.
On September 12, the Financial Intelligence Unit of Bangladesh Bank issued a letter asking all the commercial banks to provide in 10 days detailed information of the bank accounts of 39 officials of Sonali Bank including its former managing director Humayun Kabir.
An investigation by Bangladesh Bank revealed that the Hotel Ruposhi Bangla branch of Sonali Bank had lent Hallmark Group and five other companies Tk 3,606.48 crore between 2010 and May this year on the basis of fake documents.
The Hallmark Group embezzled depositors’ money in Sonali Bank in connivance with some of its officials.

Courtesy of New Age

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Value inflated abnormally

Admin — Sat, 15 Sep 2012 16:24:59 +0000

Hall-Mark’s Mortgaged Land
Value inflated abnormally
Savar police, admin always turned a deaf ear to complaints of land-grabbing against Hall-Mark in Janata Housing project
The controversial Hall-Mark Group now claims an abnormally inflated price for the 47 acres of land it has mortgaged to Sonali Bank for the Tk 2,686-crore loan it has taken using forged papers.
Through public advertisements over the last few days, the company has been claiming the market price of the land is Tk 2,000 crore, which is nearly four times the official estimate.
Sonali Bank in its primary evaluation put the price at Tk 500-600 crore, a bank official told The Daily Star.
According to another estimate by National Bank, the land is worth Tk 425 crore. (National Bank is not a party to the loan scam. The bank has done a mortgage valuation for a piece of land owned by one of its clients on the same site. The estimate is cited for the readers to see the contrast between the market price and Hall-Mark’s claim.)
Hall-Mark’s mortgaged land is at Janata Housing at Hemayetpur and Tentuljhora of Savar, said group General Manager Tushar Ahmed.
The housing project was taken up in 1978, but most of the area remains vacant in the absence of basic civic amenities and utility services.
In the city master plan the entire site is shown as wetland and rural homestead. But violating the environment law, Hall-Mark has initiated an industrial park there allegedly occupying many times more land than it owns.
Complaints of illegal occupation and vandalism against Hall-Mark piled up in the local police station, but little action followed.
Locals accuse the police and the local administration of being silent about such “land grabbing” by Hall-Mark Managing Director Tanvir Mahmud.
Some say police have some kind of “sympathy” for Tanvir.
In July last year, a group of plot owners at Janata Housing lodged a compliant with Home Minister Shahara Khatun, alleging that Tanvir and his men had forcibly occupied their land to set up the industrial park.
Ordered by the minister to recover the “illegally occupied” land, the additional superintendent of police in Dhaka in his investigation found that Tanvir grabbed at least 19 plots there.
The probe report said the Hall-Mark MD also occupied and earth-filled spaces meant for lake, market and school under the housing project. Tanvir also erected boundary walls in efforts to occupy another 200 plots in G and E blocks.
The report, submitted to the superintendent of police (SP) of Dhaka, recommended legal action against Tanvir.
Asked, SP Mizanur Rahman told this correspondent last week that Tanvir had obtained bail in all the cases in connection with intimidation and land-grabbing. The SP then hurriedly hung up the phone, saying he was busy.
In April this year, Bangladesh Water Development Board in a letter said Hall-Mark erected half a kilometre long wall on the embankment of the river Dhaleshwari. On this occupied land to the south of Singair Bridge, the company has set up a factory, a warehouse and some security posts.
The Savar police took no action although the Water Development Board filed a general diary and wrote to the officer-in-charge of the station for reclaiming the land.
Retired wing commander Hasan Masud owns a five-katha plot at Janata Housing. He said Tanvir’s men knocked down the makeshift structure and the boundary wall on his plot twice and hung Hall-Mark’s signboards there.
He said at least 50 of the affected plot owners had filed general diaries with the Savar police over the last one year but the law enforcers had done nothing.
Late last year, a Dhaka court issued an arrest warrant for Tanvir, after Muksudur Rahman, a relative of a plot owner, filed a land-grabbing case.
Contacted, Savar Police Station Officer-in-charge Md Asaduzzaman said, “We have not taken any action in connection with the general diaries as the complainants did not maintain contact with us.”
He admitted that there were about 30 GDs filed against Tanvir and his men over land grabbing.
Kamrunnesa Mohiuddin, whose makeshift structures were allegedly vandalised by Tanvir’s men, sought help from the Dhaka Deputy Commissioner, Mohibul Haque, in vain.
Mohibul told The Daily Star that the district administration had no authority to recover private land from illegal occupation.
However, a retired additional secretary wishing anonymity said the DC as a district magistrate could issue an order to calm the feuding parties to avert any untoward situation.
Hall-Mark General Manager Tushar Ahmed refuted all the allegations against the company and his MD. He said his company bought more than 100 acres of land at Janata Housing in the last six years.
The developer of Janata sold out the project’s community space to Hall-Mark, he added.
But Rafiqul Hasan Rizwan, site manager of Janata Housing, said his company did not sell any land to Hall-Mark.
Hitherto little known Hall-Mark has come to the limelight after the discovery that the company has swindled Tk 2,686 crore out of Sonali Bank’s Ruposhi Bangla Hotel branch over the last two years.
Separate investigations of the Bangladesh Bank and Sonali Bank concluded that Hall-Mark had been given the sum mainly in loans against fake documents.

Courtesy of The Daily Star

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Hallmark laundered Tk 1,000cr

Admin — Wed, 12 Sep 2012 17:28:16 +0000

The Anti-Corruption Commission has found that the Hallmark Group had laundered Tk 1,000 crore illegally by using at least 50 bank accounts in the last three years, an ACC official told New Age on Tuesday.
He said that the group’s 18 companies used at least 30 local public and private as well as foreign banks to launder the money. The ACC will file at least 50 cases next week against 61 people including Hallmark’s managing director Tanvir Mahmud, its chairman and his wife Jasmine Islam, general manager Tushar Ahmed and some Sonali Bank officials, he said.
The ACC will complete its inquiry next week after interrogating 35 more bank officials and Syed Modasser Ali, the prime minister’s health affairs advisor, said an ACC official.
After filing the cases, the ACC will investigate the embezzlement of Tk 1,686.14 crore by the Hallmark Group apart from the laundered money of Tk 1,000 crore, said an official.
The six-member inquiry committee of the ACC is now totally engaged with the inquiry into the Hallmark scam, he said.
The six-member inquiry committee is headed by ACC’s deputy director Mir Joynal Abedin Shibli. Deputy director Akhter Hamid, assistant directors Mashiur Rahman and Nazmus Sadat, and deputy assistant directors Majibur Rahman and Joynal Abedin are in the inquiry committee.
ACC’s commissioner Bodiuzzaman and director general (inquiry and investigation) MA Salahuddin will oversee the inquiry committee, said an official.
The ACC will file the cases under the Money Laundering Prevention Act, he said.
The ACC, after receiving a letter from the Bangladesh Bank on July 15, started an inquiry into the misappropriation of about Tk 3,547 crore by the Hallmark Group from the Ruposhi Bangla Hotel branch of Sonali Bank.
The ACC has already questioned 31 people, including 21 Sonali Bank officers, about their alleged link with the Hallmark-Sonali Bank loan scam, the country’s biggest ever financial scandal.

Courtesy of New Age

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18 companies of Hallmark Group obtained TIN but did not submit tax returns

Admin — Wed, 12 Sep 2012 17:24:03 +0000

The National Board of Revenue has found that 18 associate companies of the Hallmark Group did neither submit tax returns nor paid taxes for any fiscal year though the companies have obtained tax identification numbers as business entities, NBR officials said on Monday.
The NBR will serve notice very soon to the companies asking why they did not submit tax returns following the income tax ordinance and why punitive action will not be taken against the companies, the officials said.
The notice will be sent to the companies’ addresses which the revenue board has already collected from its field offices.
Till now, the NBR has found only 18 companies that had taken TIN certificates though the group, according to its managing director Tanvir Mahmud, has at least 70 to 80 companies.
The tax officials said that Hallmark Group’s managing director Tanvir Mahmud himself dodged huge amount of taxes and the NBR officials have started scrutinising his and his family members’ tax files.
Tanvir Mahmud emerging from the office of Anti-Corruption Commission recently told media personnel that he had 20 times worth of wealth of the amount allegedly taken by his company from Sonali Bank’s Ruposhi Bangla branch.
Hallmark alone swindled around Tk 2,600 crore, out of Tk 3,606 crore, from Sonali Bank, and that means he has wealth of more than Tk 50,000 crores. But he had paid insignificant amount of less than Tk two crore in taxes, tax officials said.
They said he has concealed information about his wealth including detail information of his companies, cash money and fixed deposits in different banks.
After scrutinising the tax files of Tanvir, the NBR would take action against him including freezing his and his companies’ bank accounts, if any tax evasion is found.

Courtesy of New Age

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