Over the past 15 and a half years, the private power sector in Bangladesh has witnessed rampant corruption, with Orion Group playing a particularly aggressive role.
Obaidul Karim, the head of the group, allegedly leveraged his connections with influential ministers and MPs from the former government to misappropriate thousands of crores of taka.
By forming business partnerships with these powerful figures, Obaidul Karim secured major power production projects without any tendering process.
Although the contracts for the projects were initially awarded for a three-year term, Obaidul Karim managed to extend these terms automatically.
Additionally, he siphoned off Tk5,000 crore by claiming capacity charges, without producing any electricity. Among the companies involved in these fraudulent deals, some were found to be non-existent.
Furthermore, just before the fall of the Awami League government, Karim hurriedly secured the approval of loans worth at least Tk10,500 crore.
Bangladesh Bank approved these loans at the request of three state-owned banks—Agrani, Janata, and Rupali—to fund Orion Group’s power projects, including some non-existent companies.
But the scandal does not end here. It is also alleged that Karim laundered Tk4,000 crore abroad after obtaining loans in the name of seven different companies for power projects.
According to data from the Power Development Board (PDB), over the past 15 and a half years, several private power plants were constructed without any formal tendering process.
Most of these plants have proven to be of no practical use.
During this period, Orion Group’s seven power companies took Tk 4,862 crore from the state in capacity charges without producing any electricity.
These companies include Orion Power Meghnaghat Limited, Dutch-Bangla Power & Associates Limited, Digital Power & Associates Limited, Orion Power Dhaka Limited, Orion Power Dhaka Unit-2 Limited, Orion Power Rupsha Limited, and Orion Power Sonargaon Limited. Among them, no trace of Orion Power Dhaka Unit-2 has been found.
Fraudulent loans and information
During the tenure of the previous government, at least two sections of banking law were violated, with the Bank Company Act bypassed, as Bangladesh Bank approved loans amounting to Tk10,579 crore proposed by Agrani, Janata, and Rupali banks.
Despite evidence of fraud and falsified information, the loans were finalised through syndicate financing. Regulations on single borrower exposure limits were breached, and special exemptions were made for Orion, particularly in the power sector, with the central bank issuing a directive to relax the rules.
Among these approvals, the troubled Janata Bank sanctioned a loan of Tk5,078 crore.
This loan was issued under the name of the non-existent Orion Power Dhaka Unit-2 Limited (OPDL-2) for a power project in Maheshkhali, Cox's Bazar.
However, it has been reported that this loan was not disbursed due to liquidity shortages in the bank, raising concerns at the policymaking level of Bangladesh Bank itself.
Tk4,000 crore laundered
Obaidul Karim borrowed Tk1,306 crore for a renewable solar power project aiming to produce 100 megawatts of electricity under Dubai-based companies Energon Technology and First Gen Energy, as well as China Sunergy.
At least Tk500 crore from this loan is now classified as defaulted.
Obaidul Karim’s partner in this company is his driver, Khaled Muhammad Abdullah.
Additionally, a loan of Tk1,076 crore was taken under the name of Orion Power Dhaka Unit-2, but there is no trace of the funds. This company also has Tk500 crore in defaulted loans, with a 60% stake held by China Fujian Energy.
Similarly, Tk811 crore was borrowed under the name of Orion Power Sonargaon Limited for a project aiming to produce 104 megawatts of electricity, with Tk500 crore of this now defaulted.
For a quick rental project of 100 megawatts, Orion Power Meghnaghat Limited took a loan of Tk235 crore. For a 110-megawatt project, Orion Power Rupsha Limited took a loan of Tk625 crore.
Loans amounting to Tk102 crore and Tk340 crore were borrowed under the names of Dutch-Bangla Power & Associates Limited and Digital Power & Associates Limited, respectively.
In total, Obaidul Karim is alleged to have laundered at least Tk4,000 crore abroad through various companies.
Riding on the coattails of influential figures
Throughout the past government’s tenure, Karim formed business partnerships with powerful ministers, MPs, and top leaders of the Awami League to secure major power projects for his seven companies without any competitive bidding.
Initially, the rental and quick rental power plants were set up with three-year contracts, but these were repeatedly extended over the course of 15 years.
Orion Group, led by Obaidul Karim, has thus engaged in widespread plundering.
The same power plants were sold to the government multiple times. Investors contributed only 25–30% of the total investment, with the remainder financed through bank loans.
Despite the government paying off the construction costs, the power plants remained privately owned.
Even after contract extensions, the state continued to pay for construction costs, albeit at a slightly reduced rate.
This allowed for the looting of funds under the guise of rental and quick rental power plants, which continues to this day.
To carry out these corrupt activities, Obaidul Karim enlisted the help of prominent ministers, MPs, and senior leaders from the Awami League during the previous government’s tenure.
For example, he made the influential minister Mirza Azam a business partner in Digital Power & Associates Limited, established in 2014, granting him a 40% share, while Obaidul Karim retained 60%.
In Dutch-Bangla Power & Associates Limited, established in 2011, Karim partnered with former MP from Feni, Alauddin Ahmed Chowdhury Nasim, giving him a 30% share while retaining 70% himself.
Additionally, in Orion Power Sonargaon Limited, former Narayanganj MP Shamim Osman was granted a 4% share, with former minister Mirza Azam receiving 38.4%.
Obaidul Karim kept the remaining 57.6%.
He also gave Mirza Azam 19.4% of Orion Power Rupsha Limited’s shares, making him a business partner.
