Take loans, leave country: How some Ctg businesses avoid paying back

A large number of loan defaulters leaving the country and settling abroad has put the banks and financial institutions in Chattogram in a crisis.

According to banks, industry insiders, lawyers, and court officials, 33 owners of 22 business organisations in Chattogram have left the country in the last one decade after borrowing around Tk20,000 crore. Eleven of these businessmen are currently in Canada, six are in London, four are in the USA, three are in Malaysia, three are in the UAE, two are in Turkey, and one each is in Australia, Montenegro, and Singapore. The whereabouts of the 33rd person is unknown.

Infographic: TBS

All of them face multiple financial and cheque dishonour cases and are facing arrest warrants. Twenty-six of them are banned from leaving the country. However, 13 of them left the country before the ban was imposed, while the other 13 fled after the ban was imposed.

According to sources close to them, some of these businessmen are now operating various businesses abroad, including star rated hotels, money exchange businesses, real estate, super shops, and petrol pumps. 

Ashikur Rahman Lashkar of Maheen Enterprise is the latest addition to those who have left the country without repaying bank loans. He is a businessman in the shipbreaking sector from Chattogram and took Tk2,000 crore in loans from 10 banks.

Prior to Maheen, five individuals from Chattogram's elite industrial family, Habib Group, left the country at the end of last year. The group has taken loans exceeding Tk4,000 crore from 30 banks and financial institutions.

Many of these businessmen face arrest warrants and embargo on leaving the country in multiple cases. For example, Zahir Ahmed Ratan, director of Nurjahan Group, moved out of the country last year after an arrest warrant was issued against him. The group, once a major player in consumer goods imports, particularly edible oil, owes over Tk2,600 crore to several banks.

Mishmak Group secured a loan of around Tk1,500 crore from several banks in 2008-09 following its expansion into the shipbreaking and housing sectors. However, the group's three brothers reportedly left the country in 2013. Currently, two of them, Mizanur Rahman Shaheen and Humayun Kabir are living in Canada with their families, while the third one, Mujibur Rahman Milan is living in Singapore.

Muhammad Ali, owner of Imam Group, a businessman in the consumer goods and clothing sector, fled to the United Arab Emirates in 2020 after an arrest warrant was issued against him in 55 cases. This businessman owes approximately Tk800 crore to various banks and financial institutions.

Despite some of these businessmen leaving the country, some of their businesses continue to operate. For example, Taimur Rahman, the current owner of Mostafa Group, said that the company went into crisis due to big losses in the consumer goods and shipbreaking sectors in the fiscal years 2012-15. Zahir Uddin, the group's managing director, migrated to Canada without repaying Tk2,500 crore in loans. Rahman has stated that the company is in touch with courts and creditor banks to reschedule loans, is attempting to return to business by adjusting banks' money, and has sold some assets.

Crystal Group, which operates in various sectors such as readymade garments and fishing, has outstanding bank loans amounting to approximately Tk800 crore. The group's directors, Morshed Murad Ibrahim's wife, Mahjabeen Morshed, migrated to London, while Rashed Murad Ibrahim and his wife, Kaniz Farzana, migrated to Canada. Faisal Murad Ibrahim and his wife, Humaira Karim, migrated to Turkey without repaying the loans.

Morshed Murad Ibrahim, Crystal Group's current leader, said, "Many people, including our mother, are leaders of the Crystal Group, as it is a family business. As a business-oriented family, we want to overcome the crisis and return to running operations. We have already adjusted the loan in some banks. Our debt is very low compared to our assets. We should have the opportunity to return home or move to our country to adjust the remaining debt through property buying and selling. But if our opportunity is limited then the crisis will increase."

A litany of bad loans 

In addition to the above cases, there are many more who took bank loans and left the country without paying back.

For example, Giyas Uddin Kusum of Shah Amanat Iron Mart from Sitakunda, migrated to Canada in 2015 after defaulting on loans of Tk600 crore. SM Abdul Hai, proprietor of Legend Holding, also migrated to Canada in 2017, leaving behind loans of Tk525 crore. 

Mohammad Isa Badsha, chairman of Badshah Group, moved to Canada in 2018 with Tk500 crore owed to eight banks. Abdul Alim Chowdhury of Nam Corporation secured a loan of Tk500 crore from six banks and a financial institution but left the country in 2019 without repaying the loans. 

Nazmul Abedin left the country for the UK in 2015 without repaying a loan of Tk400 crore to four banks, which he had taken in the names of his companies. Shah Alam of Alam & Co, who took a loan of Tk300 crore from eight banks, has been on the run with his wife in Malaysia for the past four years. 

Mohammad Morshed, owner of C&A Group, flew to the United States in 2018 along with his wife, leaving behind loans of Tk280 crores. Maksudul Alam, owner of MAF International, left for Australia in 2014 leaving behind unpaid debts of nearly Tk200 crores to four banks. 

Zahid Hossain Mia, director of Zahid Enterprise, left for Malaysia without repaying a loan of Tk186 crore taken from several banks. Ferdous Khan Alamgir, owner of Baghdad Group, left for Canada in 2020, leaving a loan of Tk150 crores owed to five different banks. 

Didarul Alam, owner of Iffat International in Chattogram, left for Canada without repaying a loan of around Tk150 crore obtained from two banks. Anwarul Haque Chowdhury, proprietor of SARC International, left for Malaysia in 2012 with his family after failing to repay a loan of Tk71 crore he had taken from two banks. 

SM Shamim Iqbal, owner of NM Trading Corporation and former chairman of Al Arafah Islami Bank, left for Canada with his family in 2019 without paying loans of Tk70 crore to three banks. Liakat Ali Chowdhury, owner of SL Enterprise of Khatunganj, left for London in 2012 without repaying Tk20 crore taken as loans from various banks.

Yasir Enterprise, a company located in Khatunganj, suffered significant losses in 2013 from chickpea imports. Its owner, Mohammad Mojaher Hossain, reportedly left for Canada in 2014 without repaying loans amounting to Tk1,200 crore that had been taken from several banks.

On 15 February of last year, the court responsible for loan recovery sentenced Mojaher to one-and-a-half years in prison and issued an arrest warrant against him in a case filed by three banks. During a recent visit, the office of Yasir Enterprise was found closed.

The three brothers who owned Mac International shifted from the consumer goods sector to the ship-breaking business in 2007. The company suffered substantial losses from the ups and downs in the global markets. Zainal Abedin and his family moved to Canada, and Jamil Abedin relocated to the United States in 2012.

Currently, the company owes more than Tk800 crore to 12 banks and financial institutions.

Easy loans for privileged few

Ali Tarek Parvez, executive vice president of NCC Bank, said before the fiscal 2014-15, rules and regulations were not well followed in providing bank loans in Chattogram.

"As there was an unhealthy competition among local officials in providing loans while meeting the targets of the banks, similarly, forced loans were given based on the relationship of the borrowers with the bank managers-entrepreneurs. In this process, some businessmen might have fallen into losses while others deliberately left the country without repaying the loans," he told The Business Standard.

"Bank officials have to attend court every day to recover these loans as so many businessmen have left the country," he added.

The senior banker said that the money of a bank is the deposit of the people, so the government should take initiative to bring the defaulters back to the country to recover this money.

Syed Mahmood Akhtar, senior executive vice president and head of Wholesale Banking Division (Chattogram) at Mutual Trust Bank, said, "The banks did not follow proper rules and regulations when granting these loans. Defaulters received loans based on personal relationships with the board of directors. While some borrowers suffered business losses, others intentionally embezzled funds, putting the banks in danger."

"The banks are now suing these defaulters, but many traders have already fled abroad, making it difficult to take effective action against them," he added.

Sekandar Hossain Tinku, chairman of KR Group, said, "The businessmen of Chittagong have had a long-standing reputation. However, recently some businessmen have left the country without repaying their bank loans, which has a negative impact on the entire business community of Chittagong. In the past, bank officials used to readily give investments and loans to businessmen of Chittagong, but now, loan proposals sent to Chittagong businessmen face greater scrutiny from the head office of banks and are not approved easily."

What legal people say

Rezaul Karim, an official at the Chattogram money loan court, said that 30-32 businessmen who face arrest warrants and embargo on leaving the country are currently living abroad. In multiple cases, there are arrest warrants, bans on leaving the country and seizure of passports or orders to appear in court in person.

Businessmen who do not appear in court after the order are considered absconders. Their lawyers are handling the cases on behalf of these businessmen. But in some cases, the court is in favour of one-sided hearing and judgement as the defendant is not present.

However, none of the court orders have been executed so far, he added.

Money loan court official Rezaul Karim said, "We have learned that the Nurjahan Group director has already left the country. That is why no one obeyed the court order."

In the last two years, the Chattogram money loan court has recovered defaulted loans worth around Tk1,500 crore, and during this time, verdicts have been given on 2,241 cases involving around Tk4,145 crore.

Lawyer AKM Shahriar Reza (Riyad), an attorney at the money loan court, has stated that since 2013, the amount of defaulted loans in Chattogram has been increasing  as many defaulters have been leaving the country.

He added that for the last two years, the court has taken a proactive role in dealing with defaulters, resulting in an increase in loan collection and a decrease in the number of cases.

How can these defaulters be brought back?

There are no initiatives from the authorities to bring back any of these businessmen from abroad.

To bring these defaulters back to the country, bankers say, the lender banks, the Bangladesh Bank, law enforcement agencies, and other relevant parties must collaborate and work together.

According to the information of various banks and the money loan court, the current amount of defaulted loans by 55 companies, including various industrial groups of Chattogram is around Tk50,000 crore.

On 5 January this year, the money loan court ordered the authorities to bring back the Mishmak Group's chairman Milan from Singapore in a case involving a default of thousands of crores.

Specifically, the home secretary, finance secretary, and the Bangladesh Bank governor have been directed to take the necessary measures to implement the court's order.