Citycell CEO Mehboob Chowdhury arrested for loan embezzlement

Citycell CEO Mehboob Chowdhury has been arrested at the Dhaka airport in a Tk 3.5 billion embezzlement case started by the Anti-Corruption Commission or ACC.

Chowdhury was detained after he arrived at the airport from Sri Lanka on Saturday afternoon, OC Saidur Rahman of the immigration police told bdnews24.com by phone.

"The arrest came after we received some information on him. Later, he was handed over to the ACC," Rahman said.

Chowdhury, 59, faces charges of embezzling about Tk 3.5 billion in loans taken from eight banks and financial institutions for Citycell, now shuttered by telecom regulator BTRC, with AB Bank as the guarantor.

The ACC filed the case with Banani Police Station on Jun 28. If he is convicted, he will be jailed for up to seven years.

The case also stacked charges against former foreign minister and BNP Vice-Chairman M Morshed Khan, his wife Nasrin Khan and AB Bank's Managing Director Moshiur Rahman Chowdhury.

The other accused are current and former officials of the bank and Pacific Bangladesh Telecom that used Citycell as the brand name.

Morshed Khan is the chairman of Pacific Telecom and his wife Nasrin is a director. The firm's Vice Chairman Asghar Karim is also among the 16 accused.

The accused also include AB Bank's former managing directors Kaiser A Chowdhury and Shamim Ahmed Chaudhury.

The loans were disbursed between 2011 and 2015 for 'dishonest purposes for financial benefit through fraud, corruption and misuse of power', according to the case dossier. AB Bank officials helped Pacific Telecom officials embezzle the money, it said.

With AB Bank working as its guarantor, Pacific Telecom then took Tk 1 billion from Dhaka Bank, Tk 500 million from IFIC Bank, Tk 380 million from The City Bank, Tk 500 million from NCC Bank, Tk 100 million from Bangladesh Commerce Bank, Tk 300 from Pubali Bank, Tk 230 million from SABINCO and Tk 470 million from Phoenix Limited.

AB Bank, as the guarantor, later had to repay the banks Tk 3.485 billion including the interest as Pacific Telecom failed to meet the payment deadline.

The ACC alleged that the embezzlement took place between 2011 and 2015, after Pacific Telecom applied for collateral-free loans at AB Bank's Mohakhali branch.

Citycell was closed in October last year for its failure to pay up Tk 4.77 billion in government dues.

Controversy

The slow decline of Citycell started after Mehboob Chowdhury joined Citycell as chief executive officer in 2010. The telecom operator lost 1.6 million customers over seven years on his watch.

He is often blamed for sinking the company, the oldest mobile phone operator in Bangladesh.

His controversy goes beyond his career in the telecom industry. Chowdhury was named in the leaks of the International Consortium of Investigative Journalists or Panama Papers in 2016.

Chowdhury who studied management at Dhaka University stepped into the telecom sector by landing a job at top carrier Grameenphone as director of sales and marketing in 1998, according to his LinkedIn profile. He had worked there for more than six years before his exit.

He joined Banglalink as chief commercial officer in 2005.​ After a 10-month stint, he had to leave the Orascom-owned company. His associates who worked with him said his fate was sealed after he had an open fight over his management style with Banglalink's chief financial officer who was close to the company's Egyptian owners, especially Naguib Sawiris.

Chowdhury then quickly became the chairman of the advisory board of Cogito Marketing Solutions, an advertising and PR company largely owned by his family. That created a conflict of interest in Chowdhury's profile as one of the top telecom executives.

On Saturday, an ACC team led by Deputy Director Sheikh Abdus Salam arrested Chowdhury after immigration police took him into custody, the corruption watchdog's spokesman Pranab Kumar Bhattacharya told bdnews24.com.

Salam, who is the plaintiff of the case, said they took Chowdhury to Banani Police Station afterwards and he was being kept there. He will be produced before court on Sunday.