BSEC asks for People’s Leasing’s business revival plan
BSEC, as the protector of shareholders’ rights, will also appoint a special auditor to learn the details of the past anomalies within the firm and what its current situation is
The Bangladesh Securities and Exchange Commission (BSEC) has asked the new board of directors of People's Leasing and Financial Services to submit its plan regarding the business revival of the scam-hit non-bank financial institution (NBFI).
It happened in a meeting between the securities regulator and the board members of the listed NBFI on Monday.
Court had earlier instructed the BSEC to support the company's revival.
BSEC Commissioner Shaikh Shamsuddin Ahmed told The Business Standard that the commission also asked the NBFI to conduct the statutory audit of its financial accounts.
BSEC, as the protector of shareholders' rights, will also appoint a special auditor to learn the details of the past anomalies within the firm and what its current situation is.
"The company would submit a report on how it is planning to resume its business to pay back the depositors and protect shareholders' interest," said Shaikh Shamsuddin Ahmed.
Earlier in July, the High Court formed a 10-member board of People's Leasing by appointing senior Supreme Court lawyer Kamal-ul Alam as the new chairman.
Earlier in mid-2019, the finance ministry instructed the central bank to initiate the liquidation of the NBFI as it was failing to repay its depositors due to extremely mounted default loans and aggregated losses.
Amid a large number of depositors' cries for their savings, the High Court later asked for revival initiatives instead of liquidation.
A former banker, Proshanta Kumar Halder, and his allies are blamed for embezzling thousands of crores of taka from a number of financial institutions including People's Leasing.
Halder fled the country in the meantime.
The NBFI nowadays
A member of People's Leasing's new board told TBS on Monday, as per the court order depositors would not force the NBFI for their money until the end of January.
People's Leasing has been able to recover over Tk2 crore per month from their defaulted clients recently, and it has a monthly inevitable cost of Tk1 crore.
As per the court order, it is giving back a total of Tk1 crore per month to the critically ill, senior citizen, or freedom fighters depositors.
A 10% of the deposit or Tk5 lakh whichever is higher is the ceiling for the ongoing money-back programme in humanitarian consideration of the court.
People's Leasing, which needs Tk2,000-Tk2,500 crore of funding to resume its commercial operations successfully, has three options ahead, said the member of the new board who sought anonymity.
It may have bailout funding by the government or any sound lender, or it may be merged with a healthy competitor or the firm may be sold out to new investors.
How long the firm may take to resume commercial operations that include deposit collection and lending is still unclear.
However, in the meeting with BSEC, the company officials said that they might be working with a six-month plan for the business revival.
The BSEC halted trading of People's Leasing shares in the bourses in January 2020. At the last session, the shares having a face value of Tk10 each tumbled to Tk3 as there was no buyer following the news of liquidation moves by the finance ministry.