HC rejects writ seeking winding up of Uttara Finance

The High Court (HC) has rejected a writ petition seeking the winding up of Uttara Finance and Investments Limited – a listed non-bank financial institution (NBFI).

The single-member bench of Justice Khizir Ahmed Choudhury passed the order on Tuesday (31 January).

SM Shamsul Arefin, a former managing director of Uttara Finance, filed the writ petition seeking the High Court's direction for winding up and resolving other issues of the institution.

Mahin M Rahman, lawyer of Uttara Finance and Investment Limited, confirmed the matter to The Business Standard.

In 2019 and 2020, there were irregularities in loan disbursements of Uttara Finance and Investments. Later, an inquiry committee of the central bank found irregularities of Tk5,100 crore.

Bangladesh Bank removed SM Shamsul Arefin from the post of managing director in June this year for financial irregularities and activities harmful to depositors.

The Bangladesh Financial Intelligence Unit (BFIU) found evidence of fraud as Uttara Finance reportedly disbursed loans from 2016 to 2021 without proper assessment.  

Uttara Finance was listed in the capital market in 1997 after starting operations in 1995. The company had paid good dividends to its shareholders since the bourse listing due to good financial condition. But the financial irregularities pushed the company into trouble subsequently. 

According to the latest financial statements of 2019, the company's profit was Tk118 crore as it paid 15% cash and 5% bonus dividend to shareholders that year. The company has not released any financial statements after that.

Uttara Finance's loan disbursement till June 2022 was Tk2,317 crore. Of which classified loans stand at Tk1,248 crore – which is 53.86% of total loans.