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Published : 29 Dec 2023, 12:20 AM
Bangladesh Bank has instructed the removal of SM Intekhab Alam as the chief executive officer of non-bank financial institution Phoenix Finance and Investment over ‘involvement’ in loan disbursement irregularities.
Following the instructions from the central bank’s Financial Institution and Markets department, Intekhab was ‘temporarily suspended’ on Thursday. Another CEO is to be appointed to take his place.
The letter stated that, due to Intekhab's "involvement" in activities against the interests of institutions and depositors, including loan irregularities, he is suspended and attached to the Human Resources Department.
Intekhab's three-year contract for his fourth term as CEO of Phoenix Finance was to expire on Dec 31.
As the letter was issued on Thursday, the officials of the financial institution will receive that letter next Sunday. It will bring an end to Intekhab's 16-year career as CEO of Phoenix Finance.
Phoenix Finance concluded its last board meeting of the calendar year on Thursday. The next board meeting of the institution will be held in 2024.
A major question is how the board of directors at Phoenix will respond to the central bank’s allegations and implement their orders.
Intekhab told bdnews24.com, "I have not received any letter from the board chairman. After finding out from the media, I have learned through my own initiative that my temporary suspension has been recommended. For four terms over the course of 16 years I served with distinction at Phoenix Finance. I raised it like my own child from an institution worth Tk 5 billion to one worth Tk 30 billion.“
"If there is any complaint against me, I must be given an opportunity to defend myself as per the service rules. There is no legal scope for temporary dismissal without hearing that statement.”
In an order addressed to Mohammad Mohsin, the chairman of Phoenix Finance, the central bank said the order was given under subsection (b) and (c) of section 41 (2) of the Finance Companies Act, 2023.
According to the letter, Bangladesh Bank's Financial Integrity and Customer Services Department (FICSD) conducted a special investigation into Phoenix Finance after receiving complaints of loan irregularities.
In that inspection, Bangladesh Bank says it discovered irregularities in loans given to five institutions and two individuals.
Intekhab was allegedly aided by a few other company officials in the loan irregularities.
Irregularities were reportedly found in the loan disbursements to SA Oil Refinery Ltd, Aman Cement Mills Unit-2, Monospool Paper Manufacturing Company Limited, Mahin Enterprises and Mac Steel Industries Limited, and loans given to individual customers Najma Parveen and Farhan Musharraf.
Mohammad Saiduzzaman, company secretary of Phoenix finance, told bdnews24.com, "I don't know anything yet."
Phoenix Finance, a company listed on the capital market in 2007, reported a loss of nearly Tk 3.83 billion in the first three quarters of this year (January-September) in their unaudited financial report, according to data from the Dhaka Stock Exchange. The loss per share was Tk 23.07.
The loss in the same period in 2022 was Tk 248 million, or Tk 1.50 per share. This means its losses jumped nearly Tk 3.58 billion year-on-year.
The company last paid a 12 percent bonus dividend to investors in 2020.
