With Tk2 lakh in cash, People’s Leasing promises nada to depositors

Once a financial company with considerable footstep, People’s Leasing is now scrapping the bottom with only Tk2 lakh in cash, as it faces liquidation.

Its liabilities surpass its asset by about three times and three-fourths of its loans are unrecoverable. That money will be lost forever in various pockets and will not return to People’s Leasing.

If and when that money could be recovered and divided among its about 7,000 individual depositors, each one will get Tk4.68 lakh.

This is how the health of People’s Leasing and Financial Services Ltd (PLFS), a non-bank financial institution, fares today.

The Bangladesh Bank got a decision from the Finance Ministry on June 27 to liquidate the company and the process has been afoot.

If the individual depositors get priority, it means other institutional depositors will not get back a single penny.

Of the total liabilities, the PLFS owes individual depositors Tk784 crore, institutional depositors Tk458 crore, banks Tk428 crore, financial institutions Tk369 crore and others Tk797 crore.

Alike the former directors of the company, the current ones continued their misdeeds to the last days before going into liquidation, depriving PLFS’ depositors.

They moved to sell off PLFS’ fixed assets six months ago to get prepared for liquidation.

The company started to repay money to the institutions that were linked to the directors, especially, the FAS Finance and International Leasing, ignoring other depositors’ interests, the audit team found.

The company kept its real financial scenario hidden till 2018 through accounts manipulation, and collected deposits at high interest rate.

In the annual report of 2018, the company suddenly showed its serious financial crisis.

Irregularities of restructured board

The central bank removed the PLFS directors over their alleged involvement in misappropriations of more than Tk700 crore in 2015.

The PLFS had not the financial capacity to lend any money to any organisation after the central bank restructured its board.

Despite such poor financial condition, the company continued to lend money to the institutions related to its directors, the latest audit report found.

The company mainly approved loans to the organisations related to the interest of the FAS Finance and International Leasing.

The PLFS approved a loan of Tk10 crore to Reptiles Firms Limited and Tk1 crore to KHB Securities. Both the companies are sponsors of the FAS Finance.

Two directors of International Leasing named Bashudeb Banarjee and Soma Banarjee took loans amounting Tk60 crore from the PLFS against their two firms named Dia Shipping and MTB Merin.

The International Leasing Securities, a sister concern of the International Leasing, was also given a loan of Tk21.40 crore.

The total amount of all these five borrowers stood at Tk90.18 crore as of June this year.

The link among PLFS, FAS Finance and International Leasing 

The Bangladesh Bank found that the managements of the FAS Finance, International Leasing, another non-banking financial institution, and the PLFS are controlled by a same syndicate.

The PLFS is solely controlled by Anan Chemical Industries. The P&L International Limited has a stake in Anan Chemical and it is also a shareholder of FAS Finance. The P&L International has a seat in the board of FAS Finance. In fact, the P&L International is indirectly controlling both People’s Leasing and FAS Finance. Noung Chow Mong holds the position of director at the PLFS as the representative of Anan Chemical Industries.

Irregularities in selling off fixed assets

The PLFS filed a money suit of Tk203 crore against the former directors, who took Tk123.05 crore from the company on the pretext of purchasing 66.5 katha land in the capital’s Green Road.

Whereas the current market price of per katha land in Green Road is Tk5 crore and the total value of the land is Tk332.50 crore, the issue was settled mutually among the PLFS and the directors at Tk123 crore only to benefit a certain group, the report said.

This money was supposed to be disbursed among general depositors to meet up their claims, but it was transferred to FAS.

Besides, two mortgaged flats were shown sold off at Tk2.58 crore in the PLFS’ financial statements recently.

However, the company could not provide any documents of the money.

The market value of those flats was around Tk4 crore.

The company was deprived of the proper market value of the assets in this case also, according to the central bank report.

The directors of PLFS
The directors removed in 2015 were Nargis Alamin, Humayra Alamin, Arefin Samsul Alamin, Motiur Rahman and Khabir Uddin Mia.

M Moazzam Hossanin, the then chairman of the board, was also forced to resign.

He is now in the board of a new bank named South Bangla Agriculture and Commercial.

The members of the restructured board of directors are Noung Chow Mong, Nai Aye Ching, AQ Siddiqui and Shekhar Kumar Halder.