Discovery Trading Limited, a Chattogram-based company, allegedly siphoned off $2.5 million from the country on the pretext of importing a fishing ship just after coming into operation in 2013.
Despite not getting the delivery, Zahid Hossain, managing director of the company, is believed to have forged all necessary documents – from a successful trial run report to a delivery protocol – to make Trust bank, the issuer of a transferable letter of credit on his behalf, pay the amount to the supplier, Singapore's Ariel Maritime, revealed an investigation by the Criminal Investigation Department (CID).
The exporting company handed over the job of manufacturing the ship to Merchant Hub, a Thai shipping company.
Zahid's fraudulence came to the fore when a team of Trust Bank officials on a visit to Thailand came to know that construction of the ship was still pending. Following repeated failures of Zahid in submitting a copy of the bill of entry to the bank - a proof that the ship reached Bangladesh – they went there for inspection, said the CID report submitted to court.
How money laundering takes place
Zahid and his wife Mahbuba Akhter, chairman of the company, sent a proposal to Ariel Maritime to import a fishing ship from Bangkok. After reaching an agreement, they had a transferable LC worth $2.5 million issued by Trust Bank, while the supplier nominated Standard Chartered Bank in Singapore on its behalf.
Later, he reported to the Dilkusha branch of Trust Bank that he travelled to Thailand and made a trial run of the fishing ship with two captains of their company. He also said the ship's trial run was satisfactory.
Stating that he received the ship, Zahid submitted the delivery protocol document to the bank and asked it to pay the ship supplier. After getting the written instruction, the bank paid $2.5 million in 2014, the CID report said.
When the bank asked for the document, he started wasting time saying the unfavourable weather in the Bay of Bengal was delaying the import.
In 2016, a team of Trust Bank visited Thailand for inspection and found the ship's construction was still pending.
According to their report, they found the ship at the jetty without the main engine generator and several other important equipment.
In 2017, the team again went to Thailand, and the ship maker told them that they needed more money to complete the remaining work.
But the bank officials refused to pay the extra money and instructed the supplier to send the ship to Bangladesh immediately. However, the unfinished ship still remains in Thailand.
CID investigation finds evidence of money laundering
The CID started investigating the incident in 2020. The CID's Financial Crimes Unit conducted the investigation and found Zahid Hossain guilty of laundering money in the name of ship importing.
According to CID officials, bank accounts of Merchant Hub's owner were frozen after the junta government came to power in Thailand. That is why the company could not finish the ship building owing to the financial crisis.
Yet, Zahid faked all documents, including the protocol of trail and readiness certificate of the ship on the pad of the supplier.
He also falsely claimed about the trial run of the ship by creating fake documents. The captain and chief engineer, who piloted the trial run as he claimed, were also fake, the officials noted.
The CID also found that two other captains - named Zakir Haque and Md Farooq - of his company named in the paper submitted to the bank were not employees of Discovery Trading.
The investigation showed that the real name of Captain Zakir Haque is Zakir Hossain and Captain Farooq's real name is Khan Salauddin Farooq. They both work for a company named Crystal Fisheries.
According to sources close to the investigation, Zahid Hossain, managing director Discovery Trading, handled the financial transactions very cleverly while laundering money.
They said he also planned to get more money from the bank by saying that an engineer was hired after the handover of the ship. He was also looking for more funds to sail the ship in Bangladesh. He was repeatedly urging the bank officials for that.
The CID also came to know about several cases filed against Zahid Hossain for not repaying loans taken out from different banks. So far, around 50 cases have been filed against him over various allegations with different police stations in Dhaka and Chattogram.
Currently, Zahid Hossain is in custody in a fraud case and his wife is abroad, the sources said.
Humayun Kabir, special superintendent of police in the CID's Financial Crime unit, told The Business Standard, "The CID filed a money laundering case against the accused. The investigation is over. We found evidence of laundering $2.5 million."
When contacted, Humaira Azam, managing director of Trust Bank, declined to comment on the issue.