Six lenders are going to put some property of the Jubo Karmasangsthan Society – well known as Jubok – on auction to realise the amount the organisation had taken as loans and then defaulted on repayment.
Besides swindling general investors out of Tk2,500 crore, Jubok embezzled a syndicate loan of Tk300 crore taken out from six banks and financial institutions in the name of imaginary projects in 2004. The loan amount now stands at Tk446 crore with interests.
The loan was taken out in the name of a business enterprise named Telebarta, with the promise of building towers for mobile operators in different parts of the country. However, no existence of this project of Jubok could be found.
The lenders have fought for 12 long years to recover the loan from the institution. Having won that battle, they are now going to put up two mortgaged properties of Jubok for auction on 25 January 2021.
The six banks and financial institutions are Dhaka Bank, AB Bank, Uttara Bank, People's Leasing and Financial Services, Phoenix Finance and Investment, and Premier Leasing and Finance Limited. Dhaka Bank is the lead bank in the syndicate loan.
Out of Tk300 crore, Dhaka Bank provided Tk100 crore, AB Bank Tk100 crore, Uttara Bank Tk50 crore, People's Leasing Tk25 crore, Premier Leasing Tk15 crore and Phoenix Finance gave Tk10 crore.
The two properties that will be auctioned off are a 1.5-bigha plot with a building in the Tejgaon industrial area and a 13-katha plot at Purana Paltan Lane in the capital.
According to the report of a commission formed in 2010 under the leadership of Farashuddin Ahmed, former governor of Bangladesh Bank, after the Jubok scandal came to light, the then market value of the plot in Tejgaon was around Tk350 crore. On the other hand, the plot at Purana Paltan Lane was worth around Tk100 crore.
Farhana Ahmed, chief legal officer of Dhaka Bank, told The Business Standard that after filing a case against Jubok in 2008, Dhaka Bank took custody of the two mortgaged properties.
There are allegations that an influential minister in the then BNP-led government, who was also a founding member of Dhaka Bank, played a role in giving the loan to Jubok. Dhaka Bank, however, claimed that the loan was given in compliance with the relevant rules after proper verification of Jubok's investment in Telebarta and its assets.
Jubok started its activities in 1994 with 40 directors under the leadership of Chairman Abu Mohammad Saeed and Executive Director Hossain Al Masum, without any government registration.
The company got registered in 1997 under The Societies Registration Act, 1860.
From its inception, Jubok started to lure in monthly deposits at a minimum of Tk500 per member, promising to pay Tk10,000 in annual interest against a deposit of Tk1 lakh.
The company also collected money with the promise of providing housing project plots.
The company collected Tk2,500 crore from depositors before its closure in 2006. Before that Jubok had started at least 20 ventures with the collected fund. Telebarta was one of the most prominent among those projects.
Jubok said it would set up 250 towers across the country to lease them out to mobile operators under the Telebarta project. The bank loan application also mentioned the construction of a tower as well as the setting up of a switching control room for Jubok Phone.
12-year legal battle
The trial in a case filed against Jubok in the Artha Rin Adalat in Dhaka in 2008 to recover the defaulted loan began in 2011. After Jubok filed a writ petition in the High Court, the court first adjourned the case for six months.
The suspension was later extended to mid-2014. After the stay order was lifted in the same year, the trial resumed in October. On 19 November last year, the Artha Rin Adalat delivered its verdict in favour of the banks and financial institutions.
After an execution case was filed for the implementation of the verdict, the court last November ordered the individuals concerned, including the deputy commissioner of Dhaka, to sell the mortgaged properties and repay the debt.
Farhana Ahmed, legal officer of Dhaka Bank, told TBS that the mortgaged properties will be put up for auction on 25 January at 2pm.
Dr Farashuddin said Jubok not only took money fraudulently from people, but also took out loans from banks in a similar manner. Necessary measures must be taken to find out how the organisation that has been controversial since its inception managed to receive such a large syndicate loan, he said, adding action must be taken accordingly.