In a brazen case of war of hobby, Chowdhury Nafeez Sarafat, extinct chairman of Padma Bank, drained Tk245 crore from the rip-off-hit financial institution to an asset management company, Strategic Equity Administration Cramped (SEML), which is owned by his companion Anjuman Ara Shahid.
However he did no longer finish there; he invested funds from this asset management company into a original non-financial institution finance company whereby both his companion and son Raheeb Safwan Sarafat Chowdhury are shareholders.
He established this original non-financial institution finance company known as Strategic Finance Investments Cramped (SFIL) in 2020, falsely presenting two international firms based entirely mostly in the US and Canada as shareholders.
The two companies – Canadian Maple Strategic Wealth Administration LP and US-based entirely mostly Statisticker Inc – were listed as having invested Tk50 crore in SFIL and keeping 50% of the shares. Then again, both companies were chanced on to be fictitious.
In its 2021 annual document, SFIL claimed that both international companies were registered with the securities and change commissions in the US and Canada.
Then again, a TBS investigation unearths that no such companies are listed on the Canadian and US exchanges. Also, the representatives of these international merchants were chanced on to be connected to Nafeez.
Your entire draw unearths how he orchestrated a cobweb of interconnected companies with overlapping shareholders. Some directors appointed to SFIL were representatives of assorted companies linked to the Canadian University, based by Nafeez.
Nafeez labored as head of priority banking at Typical Chartered Bank in 2001 prior to turning into a shareholder director of Padma Bank (formerly identified as Farmers Bank) in 2009 when it used to be granted a licence.
He did no longer want to undercover agent abet since then as he emerged as a commercial effectively off individual all the strategy thru Sheikh Hasina’s finish to 16-year tenure.
Right here goes the anecdote….
How Nafeez entered Padma Bank
Nafeez became a sponsor shareholder of Padma Bank at its inception in 2013, representing the First Bangladesh Mounted Profits Fund managed by his asset management firm – RACE.
In his biography, which he submitted to change into a director of Padma Bank, Nafeez disclosed owning 24.25% of RACE Asset Administration Ltd, as per paperwork, obtained by TBS.
He joined the board in 2015 and used to be appointed chairman of the audit committee, in line with a letter sent to the Bangladesh Bank and considered by TBS.
He then began draining funds from Padma Bank underneath the guise of investments in his asset management companies, in conjunction with RACE. These investments failed to generate returns for Padma, ensuing in a excessive liquidity disaster that in some way caused the financial institution to give method.
By 2017, Padma Bank used to be unable to repay its depositors due to unhappy investments and mortgage corruption, and it neither recovered its invested funds nor earned any returns.
Later, the Bangladesh Bank reconstructed the financial institution’s board in January 2018 removing all 19 founder directors aside from Nafeez. No matter being on the board that confronted allegations of mortgage corruption and fund mismanagement, Nafeez used to be appointed the financial institution’s chairman by the Bangladesh Bank underneath the governorship of Fazle Kabir.
Right here is how Nafeez grabbed the financial institution with out investing a penny from his pocket.
“The board of the financial institution took the choice to nominate him based entirely mostly on the advice of the central financial institution,” The Daily Huge name reported on 15 January 2018 quoting Sarafat.
“I’ll wait on as chairman of the financial institution as an institutional representative of 12 organisations,” he additionally said.
Soon after turning into chairman, he renamed the financial institution Padma from the distinctive name Farmers.
Though Farmers Bank used to be given a licence for banking operations to provide financial products and providers to farmers on a priority basis, it deviated from its intention by altering the name.
Soon, the reveal-owned Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank and Funding Corporation of Bangladesh were forced to make investments Tk715 crore as bailout for the erstwhile Farmers Bank.
The reveal-owned banks additionally invested a further amount of spherical Tk1,000 crore in the financial institution in quite a lot of kinds, equivalent to subordinate bonds and mounted deposits “underneath power”.
After bringing funding from reveal-owned banks, Nafeez as the chairman of Padma Bank held a gathering on the Westin Hotel with all merchants when the media used to be invited.
In that meeting, Benazir Ahmed, extinct inspector long-established of police, used to be additionally most modern and he equipped himself as a cousin of Nafeez when handing over a speech on the tournament.
Then again, the entire funding of public money may perhaps perchance additionally no longer finish the capital erosion of the financial institution, as corruption persevered.
Below his chairmanship, Padma Bank issued a assertion in September 2021 announcing that it had entered into an settlement with US-based entirely mostly funding financial institution DelMorgan and Company to right a $700 million funding, comprising $350 million in fairness and $350 million in credit rating facilities.
Below the pretence of securing international funds, the financial institution, with the central financial institution’s consent, reconstructed its steadiness sheet whereas concealing accrued losses exceeding Tk900 crore. It additionally eradicated outdated annual experiences from its web intention to obscure its financial effectively being and quite a lot of essential aspects.
Also, the Bangladesh Bank eased guidelines for Padma Bank, in particular concerning the repairs of the Money Reserve Ratio and Statutory Liquidity Ratio.
Then again, the promised funds never materialised as the announcement of securing international funding became out to be entirely untrue.
He served as chairman of the financial institution for six years, whereby he neither attracted any original investments nor improved the financial institution’s financial effectively being. Meanwhile, he established another finance company and resigned from Padma Bank in January 2024.
Almost immediately after his resignation, the financial institution’s merger with another institution used to be equipped.
How Nafeez frail Padma to make investments in his companion’s company
In 2015 and 2016, Padma Bank invested Tk145 crore into three newly established mutual funds: Tk100 crore in the First Alternative Funding Fund, Tk25 crore in the Strategic Equity Administration Shariah Fund, and Tk20 crore in the Strategic Equity Administration Fund.
On the time of these investments in the newly equipped particular-motive automobiles and change funds, Nafeez used to be the chairman of the financial institution’s audit committee.
All these funds were managed by Strategic Equity Administration Cramped (SEML), an asset management company owned by Anjuman Ara Shahid, as notorious by the Registrar of Joint Inventory Companies (RJSC).
Furthermore, Anjuman is a sponsor shareholder of Padma Bank, keeping 20 lakh shares, in line with financial institution paperwork.
SEML now holds 6% shares in the original finance company SFIL. Ehsanul Kabir, managing director and CEO of SEML, used to be nominated for the corporate in SFIL.
Anjuman frail multiple layers to retain her relationship with SEML hidden.
For occasion, Mashiur Rahman, a retired bureaucrat who served as director long-established of the Telecom Division on the Ministry of Posts and Telecom, is now the chairman of Strategic Equity Administration. He used to be appointed as the director by SoftHorizon, which is owned by Anjuman Ara, in line with the RJSC.
When contacted, Mashiur Rahman said he has no relation with SEML. He is best an worker of Nafeez’s company CdNet Communications. He is the CEO of CdNet Communications the build Nafeez holds foremost shares. Nafeez is additionally with SFIL which is additionally a shareholder of CdNet, he added.
“I used to be saved as nominated director in SoftHorizon and nominated chairman for SEML nevertheless I know nothing about those companies,” Mashiur suggested TBS.
“I used to be no longer even asked concerning the nomination for the chairmanship of SEML. I with out discover came to consider that I used to be nominated as the chairman of this company. They [Nafeez and his wife] assuredly elevate letters about such nominated directorship to me and I agree if there may perhaps be rarely any longer a objection,” he said.
Sooner than joining CdNet, he served Bangladesh Submarine Cables PLC for bigger than four years till 25 June 2022. Soon after his retirement, he joined CdNet on 25 August 2022.
“Nafeez picked me as I truly bear long ride working with the Submarine Cables PLC,” he said.
The government issued three submarine cable licences in the non-public sector in September 2022 to Summit Communications, CdNet Communications, and Metacore Subcom Ltd.
Earlier in 2021, MK Alamgir, the founding chairman of Padma Bank, filed a complaint with the Bangladesh Securities and Substitute Rate (BSEC), claiming that his successor Nafeez Sarafat invested Tk100 crore from the financial institution in First Alternative Funding Fund thru his quite a lot of company SEML, which constituted a war of hobby.
Alamgir who resigned from the financial institution on allegations of mortgage corruption sought an investigation into this matter.
BSEC Chairman Shibli Rubayat-Ul-Islam, at an tournament organised by the Economic Newshounds Forum on 13 March 2021, acknowledged the complaint, announcing they’ll undercover agent into the misuse of the fund. Then again, there has been no reported progress on the investigation.
Furthermore, in 2015, Padma Bank invested Tk100 crore in a newly equipped funding vehicle known as the Bangladesh Mounted Profits Particular Purpose Vehicle.
The fund supervisor of this funding is Bangladesh Traipse Administration, a non-public company owned by Nafeez.
Sentinel Trustee and Custodial Products and providers Cramped, established by Nafeez and his friends, served as the trustee for Tk100 crore of the Bangladesh Mounted Profits Particular Purpose Vehicle fund. Sentinel shares the similar place of work take care of as Traipse Asset Administration on its web intention, highlighting their connection.
In step with BSEC guidelines, the fund supervisor and trustee may perhaps perchance additionally merely peaceable be separate entities to guard merchants’ pursuits.
When asked about Padma Bank’s investments in his companies all the strategy thru his tenure, Nafeez replied, “I used to be neither the chairman nor the Audit Committee Chairman of Padma Bank’s Board of Directors when these investments were current by Muhiuddin Khan Alamgir (extinct Chairman) and Babul Chisty (extinct EC Chairman). Furthermore, the Audit Committee does no longer approve investments.”
He additionally asserted that “Strategic Equity Administration is rarely any longer owned by my companion.”
He claimed that Padma Bank earned Tk39.50 crore till the 2023-24 financial year from those investments made all the strategy thru the year 2015-16. Then again, The Business Typical may perhaps perchance additionally no longer take a look at the records as he did no longer provide any supporting paperwork.
“Though I am no longer the most contemporary chairman of the Bank, upon your count on, I obtained this records from the financial institution,” said Nafeez in a written comment.
How he units up a original finance company
When bigger than half of 29 non-financial institution financial institutions were struggling to outlive, the Bangladesh Bank issued the licence of another original company, SFIL, in March 2020 in line with the declaration that a essential fragment of the funding would attain from international merchants.
The licence used to be given when Nafeez used to be the chairman of Padma Bank which used to be on the brink due to mortgage corruption.
In step with the annual document of SFIL for 2022, shareholding contains 96% institutional investments and 4% held by two folk.
Amongst particular individual directors, Anjuman Ara Shahid, and Raheeb Safwan Sarafat Chowdhury combinedly support 4% shares worth Tk4 crore.
Anjuman Ara Shahid is the founding chairperson of SFIL and he or she used to be equipped as a Canada-based entirely mostly ladies folk entrepreneur and vice-chairman of the Canadian University of Bangladesh in the annual document.
Then again, Nafeez in his biodata submitted to the then Farmers Bank in the year 2009 as a sponsor shareholder, talked about that his companion is a housewife.
He additionally talked about that he used to be a relationship supervisor at Typical Chartered Bank till September 2001. He became chairman of Traipse Administration in 2008.
No matter getting disclosure of his companion and son’s directorship in the annual document of SFIL, Nafeez lied to The Business Typical announcing that “Neither me nor any of my family support any directorship on this NBFI. A checklist of SFIL’s board of directors is accessible at: https://www.sfilbd.com/about-us/leaders/board-of-directors. You may perhaps presumably perhaps additionally detect from this checklist that no longer one amongst the administrators of SFIL are employed on the Canadian University of Bangladesh and none of my family is a director at SFIL.”
After TBS approached him for comment, he eradicated the annual experiences for 2020 to 2022 from the SFIL company web intention. Beforehand accessible by hyperlinks, these experiences are no longer on hand following the inquiry.
Meanwhile, the Bangladesh Monetary Intelligence Unit (BFIU) on 26 August asked banks to freeze the accounts of Chowdhury Nafeez Sarafat, his companion Anjuman Ara Shahid and son Rahib SafwanSarafat Chowdhury.
The BFIU has additionally asked banks to suspend all transactions conducted underneath their privately owned institutions.
The organisation has directed the suspension for 30 days underneath Allotment 23 of the Money Laundering Prevention Act, 2012.
Chowdhury Nafeez Sarafat is additionally the chairman of Bangladesh RACE Administration PCL, the nation’s biggest fund management company.
How he secured SFIL’s licence with untrue claims
Though the SFIL in its annual document claimed that 50% of funding worth Tk50 crore came from US and Canada-based entirely mostly merchants named Statisticker Inc and Canadian Maple Strategic Wealth Administration LP, both companies were chanced on to be untrue.
On different hand, representatives from the Canada-based entirely mostly company in SFIL are chanced on connected with the Canadian University Of Bangladesh based by Nafeez.
One other investor, Statistiker, which SFIL claimed used to be a US-based entirely mostly company, is represented by a Bangladeshi retired bureaucrat.
Canadian Maple Strategic Wealth Administration
The corporate holds Forty eight% shares worth Tk48 crore and US-based entirely mostly Statisticker Inc holds a 2% portion worth Tk2 crore of SFIL.
The annual document for 2022 equipped Canadian Maple Strategic Wealth Administration as a Toronto-based entirely mostly licenced fund listed with the Ontario Securities Rate.
Then again, The Business Typical chanced on no listed firm on this name with the Ontario Securities Rate. There is another firm named Canadian Maple Equity Administration Inc. on hand and the emblem of this company appears to be connected to the emblem frail for Canadian Maple Strategic Wealth Administration in the SFIL annual document.
When inquired thru electronic mail from The Business Typical, Canadian Maple Equity Administration confirmed that it is no longer connected to Canadian Maple Strategic Wealth Administration.
TBS investigation additionally chanced on that the corporate is rarely any longer registered anyplace. The Maple web intention phone number is chanced on on the name of A Shahid (4167559132), which is Anjuman Ara Shahid of SFIL.
In step with the annual document, Professor William H. Derrenger is the nominated director of Canadian Maple Strategic Wealth Administration. He is the founding vice chancellor of the Canadian University of Bangladesh, which used to be based by Chowdhury Nafeez Sarafat.
When asked concerning the connection with Canadian Maple, Derrenger said, “I truly were an just director representing our Canadian shareholders from the inception. I truly were slothful from the muse; I truly bear never had noteworthy contact with different board members aside from all the strategy thru the occasion.”
He has been slothful from the muse as no funding came from the merchants who were intended to make investments, in line with him.
One other nominated director from Canadian Maple Strategic Wealth Administration LP is Md Shahrukh Adnan Khan, who used to be additionally equipped as the partner professor and acting dean of the College of Science and Engineering to boot to head of the EEE division and director of Innovation and Commercialisation Centre on the Canadian University of Bangladesh.
Statisticker Inc
One other international investor used to be equipped in the annual document as a US-based entirely mostly licenced fund supervisor listed with the US SEC.
Then again, The Business Typical investigation chanced on no registered firm on this name with the US SEC.
The Business Typical enquired concerning the corporate with the support of the US Embassy in Dhaka and chanced on that the corporate is registered by a Bangladeshi particular individual. The corporate is rarely any longer operational.
Zahid Hossain, a retired bureaucrat, represents Statisticker Inc. as the nominated director, in line with the annual document of SFIL. He used to be equipped as the extinct executive chairman of the Board of Funding in the SFIL annual document for 2022.
Then again, TBS did no longer fetch any executive chairman at this name in the Board of Funding (BOI) which used to be later renamed as Bangladesh Funding Pattern Authority (Bida).
When contacted about international merchants, Nafeez who claimed he has no relation with SFIL said “I had enquired the managing director of SFIL Finance PLC and used to be told that both these international companies are legit and governed underneath international jurisdictions.”
He additionally defended the international funding announcing, “The Bangladesh Bank, upon verifying their existence, and after scrutinising their capital contributions had issued NBFI licence.”
Furthermore, he talked about that funding from both these companies came thru appropriate banking channels.
SFIL institutional merchants linked to Canadian University
Amongst quite a lot of institutional sponsors, Strategic Finance holds a 20% portion worth Tk20 crore and Padma Bank Securities, whereby Padma Bank invested Tk100 crore, holds 20% worth Tk20 crore.
Shahnul Hasan Khan represents the nominated director for Strategic Finance who used to be equipped as the executive chairman of the Canadian University of Bangladesh in the annual document of SFIL for 2020.
Within the most contemporary annual document for 2022, Shoriful Islam used to be shown as nominated director for Strategic Finance who used to be equipped as a extinct worker of RACE Administration.
Mohammad Shariat Ullah is the nominated director of Padma Bank securities on the SFIL board.
He used to be equipped as the managing director of Project Cramped and head of IT of Padma Bank Securities Cramped and Canadian University of Bangladesh, Dhaka.
Padma Bank securities, whereby Padma Bank invested Tk100 crore, is now keeping 20% shares of SFIL worth Tk 20 crore.
The place of work of SFIL is additionally located on the Canadian University of Bangladesh premises.
