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Published : 23 Aug 2024, 02:22 AM
The Securities and Exchange Commission, or SEC, has ordered a freeze on the Beneficiary Owners account of Chowdhury Nafeez Sarafat whose name has been mired in financial controversies.
On Aug 16, an Anti-Corruption Commission director, speaking to bdnews24.com on condition of anonymity, said: "He (Nafeez) is accused of embezzling money from the stock market and taking control of Farmers Bank. An inquiry into these allegations began a few months ago, with initial claims of a Tk 8 billion loss against him."
On Thursday SEC said the account of Multi Securities and Services Limited, a stock trading intermediary, will be blocked alongside Nafeez’s BO account.
Nafeez, a former bank clerk, has evaded any inquiry until now despite a series of allegations of financial irregularities during the last three terms of the Awami League government.
An investigation team from the Dhaka Stock Exchange visited Multi Securities and Services Limited, a registered brokerage firm, to probe allegations of irregularities and share scams.
However, the brokerage firm did not permit the investigation team to conduct their inspection and reportedly did not even allow them to enter the premises.
Later, the brokerage firm’s ability to offer ‘margin loans’ and update its securities licence was halted with the imposition of various restrictions.
As a DSE shareholder, the brokerage house will not get any dividends until further notice.
All BO accounts of Hasan Taher Imam, another owner of the brokerage firm, have been suspended along with those of Jalal Ekramul Kabir, the CEO and director of the brokerage house, due to non-cooperation.
Ekramul Kabir did not respond to attempts to reach him for comments.
Acting Managing Director of DSE AGM Sattique Ahmed Shah told bdnews24.com: "DSE has not taken any action. We have only submitted reports to the regulatory body regarding the brokerage firm and its owners."
Nafeez Sarafat is the former chairman of Padma Bank – previously Farmers Bank and owns the asset management company Race Asset Management PLC.
Also the chairman of the board of trustees for the Canadian University of Bangladesh, the native from Gopalganj has expanded his businesses in the hotel, power, mobile tower, media and other sectors over the last decade.
Farmers Bank went through a change of ownership in 2017 when it was about to be shut down amid irregularities and loan scams. In the face of pressure, Mohiuddin Khan Alamgir, an Awami League Presidium member, had to step down from the post of chairman.
Nafeez took over as the chairman the next year. The Farmers Bank was rebranded as Padma Bank in January 2019.
To rescue Padma Bank, Tk 7.15 billion was arranged from the state-owned Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank and Investment Corporation of Bangladesh (ICB) through a government initiative. It was equivalent to 66 percent of the total capital of the bank.
Due to its financial crunch, Padma Bank has failed to pay back its clients. Under those circumstances in 2020, it proposed a merger with any state-owned bank. Another proposal was made to issue shares for the state-owned banks and financial institutions equivalent to the capital Padma Bank received.
Bangladesh Bank wrote to the Financial Institution Division at the Ministry of Finance that the Padma Bank’s proposal of issuing shares did not ‘align with’ the Bank Company Act.
The Ministry of Finance agreed with Bangladesh Bank and turned down the proposal. The central bank then suggested that Padma Bank seek foreign investment. It failed in that too.
In 2019, when Farmers Bank was rebranded as Padma Bank, the institution’s defaulted loans stood at Tk 37 billion. By the end of 2023, this amount had risen to Tk 37.62 billion, accounting for about 64 percent non-performing debt. This indicates that during Nafeez's tenure, defaulted loans increased by approximately Tk 6.02 billion.
Nafeez resigned as chairman of Padma Bank on Jan 31 this year amid discussions about the bank's struggles. Following his resignation, the Padma Bank board, with the mediation of Bangladesh Bank, reached an agreement in March to merge with Exim Bank.
In May, Shafiqur Rahman, chairman of Citizen TV and Awami League MP in the 12th parliament, alleged that Nafeez had taken him to the residence of former IGP (RAB director general at the time) Benazir Ahmed one night and forcibly seized ownership of Citizen TV from him.
In 2021, a cartoon by Ahmed Kabir Kishore caused a stir on social media. The cartoon depicted Nafeez with a bank's symbol, the chest handle, on his body instead of a navel, captioned, “Ami Chow Nafeez Sarafat/Jani Bank Khawar Dharapat!”
At that time, social media discussions indicated that online activist Mushtaq Ahmed wrote the caption above the cartoon drawn by Kishore.
In May of that year, Mushtaq Ahmed, Kishore, and four others were arrested on charges of 'anti-government propaganda and rumour.'
The 53-year-old Mushtaq died in Kashimpur's high-security jail after being repeatedly denied bail. After his release on bail, Kishore raised complaints of torture.
