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The prohibited drug cocaine is internationally banned, including in Bangladesh. However, a client of Jamuna Bank has succeeded in attempting to bring this high-priced drug into the country's market.
Noor Trading Company, a client of the Andarkilla branch of Jamuna Bank in Chittagong, opened a letter of credit (LC) with the bank and imported cocaine under the guise of spice importation.
The bank authorities took action against the manager of the branch in this egregious fraud incident. However, allegations suggest that Jamuna Bank got the assistance of the Bangladesh Financial Intelligence Unit (BFIU), the economic intelligence agency of the Bangladesh Bank (BB), to cover up the incident.
The Daily Messenger obtained a copy of an investigation report by the BFIU. After reviewing the report, it was discovered that the incident took place in 2017. Nevertheless, the BFIU's inspection team probed the incident and uncovered more fraud. Later, Jamuna Bank was able to conceal the matter in collusion with the then authorities of the organisation. Moreover, despite such a significant fraud, Jamuna Bank wrote off the liability of customer Noor Trading Company, amounting to more than Tk 8.62 crore.
According to the report, Noor Trading Company opened an LC worth a total of $3.81 million at the Andarkilla branch of Jamuna Bank at various times. In the first LC (LC No- 304617010428), the company declared the import of cumin worth $1.87 million from India. However, instead of India, the port of loading for the cumin import is shown as UAE.
Although Bangladesh has a direct import-export trade with India, the Bangladesh Bank's (BB) inspection team considers the import of goods through another country's port as an opportunity to show overpricing. Furthermore, the goods were imported from UAE, and the shipment came from Colombo port in Sri Lanka. Meanwhile, the goods were imported after the LC had expired, raising suspicions, according to officials.
Similarly, goods worth $93,600 were imported through the second LC (No- 304617010617), declaring the import of cumin. In this case, too, after the LC had expired, the goods were shipped from Colombo port instead of UAE. The third LC (No. 304617010603) declared the import of red pepper from Vietnam worth $40,600. However, from the LC's bill of loading (No-VNSGN169196), it can be seen that the import was shipped from Jebel Ali port in the United Arab Emirates.
Additionally, LC (No- 304617010614) worth $60,000 was opened for the import of raw dates from Iraq. The port of loading is shown to be any port in UAE for carrying out this import. Despite having import-export trade ties with Iraq, the product was imported from the port of another country, which is suspicious, as commented by the inspection team.
It is learned that these imported products arrive at Chittagong port. A large amount of cocaine is found while unloading these products at the port. The police arrested the client of Jamuna Bank in this incident. After the incident, Jamuna Bank also ceased the client's banking activities. Later, the customer's liability of Tk 8.62 crore was written off by the bank.
The investigation team of the central bank raised questions about the writing off of this liability in just one year. Furthermore, the BFIU wants an explanation of the logic used in the case of money laundering in the name of imports. However, the report also stated that the bank did not provide any explanation in this regard.
Moreover, neither the branch nor the head office has provided a Suspicious Transaction Report regarding import and loan activities. The bank did not even take precautionary measures. Jamuna Bank has not verified the possibility of money laundering even after writing off the liability.
The bank provided an explanation later. In clarification, the bank claimed that the shipment of cocaine was not related to the bank's importation. Despite the discovery of cocaine in the goods brought to Chittagong port, the inspection team submitted a report recommending that the bank be penalised under section 23(5) of the Money Laundering Act, 2012, for not verifying possible money laundering in foreign transactions of the customer and not filing the suspicious transaction report.
However, the authorities of BFIU did not take any action in this incident. Allegations of unethical transactions with the bank were also raised against those concerned. BFIU authorities changed the inspection team that first submitted the report against the bank. In the report submitted by the second inspection team, this serious irregularity was glossed over, as noted by the then deputy head of the organisation and executive director of BB, Iskandar Mia, in a separate note in his report.
Iskandar Miah wrote in his note, “Several serious irregularities were detected in the international trade of the four AD (Authorized Dealer) branches of Jamuna Bank. From that source, it can be observed that initially the case is presented through the inspection team, but later it is being presented through other officials. In this case, it appears that the serious irregularities have been gradually overcome.”
Meanwhile, it is also alleged that the report kept the case limited to the then general manager (now director). In these cases, fines or punishments are usually imposed on the head of the institution. Still, in this case, it is limited to the general manager. Even the deputy head was not represented. BFIU's current head, Masud Biswas, and deputy head AFM Shahinul Islam were called to inquire about this, but they didn’t respond.
Then the BFIU Head, Abu Hena Razi Hasan, was contacted to know about these issues. He told The Daily Messenger, “Such incidents happen a lot. I don't remember at the moment. Also, according to our company rules, no ex-official can comment on any previous incident. Therefore, I cannot comment on this matter.”
A top official of BB told The Daily Messenger, “This incident of Jamuna Bank is very sensitive. What Jamuna Bank has done in this regard is a serious punishable offense. However, no action was taken in this regard for some reason. The BFIU head bypassed the deputy head and passed the note very quickly. In this case, the bank covers up the incident by punishing only one person. However, no one related to the branch head, internal audit department, and head office was brought under punishment in this incident.”
Attempts were made to contact several officials of Jamuna Bank to find out about this. But no one gave a statement. The managing director and chief executive of the bank, Mirza Ilyas Uddin Ahmed, were called several times, but he did not respond. Later, a question was sent on WhatsApp, but he did not answer it.
In addition, when the bank's public relations officer, Sarwar Matin Imon, was called, he requested this reporter to send questions. The question was sent to his WhatsApp number on December 12. Even after a week, he did not reply.
Abdur Rauf, the company secretary of the bank, told The Daily Messenger, “I was not in the bank at the time of the incident. So, I can't say anything about it.”
Messenger/Alamin
