A company named Vista International, with a paid-up capital of only Tk1 crore and total assets valued at Tk77 lakh, claimed involvement in foreign trade.
However, no records of import-export activity have been found for the company.
Despite this, IFIC Bank granted Tk180 crore in unsecured loans to this paper company towards the end of 2022.
Just a month before the fall of the Awami League government amid a student-led uprising, the bank’s board of directors, led by Salman F Rahman, then adviser to the prime minister on private industry and investment, approved an additional Tk290 crore in loans, bringing the total to Tk470 crore.
Similarly, two other fictitious firms, Glowing Construction & Engineering Limited and Skymark International, were granted Tk495 crore in loans by the bank’s branch, which was later increased to Tk1,165 crore in July 2023.
Within just 18 months, loans disbursed to these entities swelled from Tk675 crore to Tk1,635 crore, raising concerns of abnormality, as reported by Bangladesh Bank.
In a striking revelation, IFIC Bank extended loans of Tk2,375 crore to five separate firms, each of which opened accounts in June and July 2022 and began operations soon after.
This brings the total amount of loans disbursed to the eight firms to an alarming Tk4,010 crore, which industry insiders have labelled "unbelievable."
Bangladesh Bank's report reveals that false information regarding business success, debt leverage ratios, liquidity, operational efficiency, and earning potential were used to secure these massive loans.
Offsite Supervision Division of the central bank flagged this as posing significant risks, citing doubts about the utilisation and recovery of these loans.
The shell companies involved are also financially weak, with various other indicators falling into marginal territory.
Bangladesh Bank expressed concerns about the inability of these entities to repay the loans.
Salman F Rahman had chaired IFIC Bank’s Board since 2015, while his son, Ahmed Shayan Fazlur Rahman, also served as a director and vice chairman of the bank.
After the fall of the Awami League government, Salman F Rahman was removed from his position due to non-performing loans, and Bangladesh Bank approved a new board for IFIC in early September.
Allegations have surfaced that, during his tenure, Salman F Rahman siphoned over Tk10,000 crore from the bank using various methods under different names.
Industry insiders suggest that Salman F Rahman and his family-owned Beximco Group benefitted from these loans, which were ostensibly distributed to the shell companies.
IFIC Bank's internal audit confirms that by December 2022, the bank's Federation and Principal branches had disbursed Tk2,375 crore to these five fictitious firms.
One of these companies, FarEast Business Limited, opened its account in June 2022 and received Tk614 crore in loans, despite providing no details on the nature of its business.
Another company, Sunstar Business Limited, also started operations in June 2022 and was granted Tk615 crore.
Similarly, Cosmos Commodities was loaned Tk612 crore, bringing the total loans to these three firms to Tk1,868 crore.
Further, two other shell companies, Brightstar Business Limited and Altron Trading Limited, both established in July 2022, received over Tk1,000 crore in loans.
Brightstar was granted Tk85 crore within just 20 days of opening its account, while Altron was given Tk95 crore within 27 days.
By August 2023, Altron’s loans had escalated to Tk449 crore, with both companies' total debt standing at Tk507 crore within a year.
No proof of foreign trade
Vista International and Skymark International were granted loans amounting to Tk1,015 crore, allegedly for international trade, but Bangladesh Bank found no evidence linking these companies to any such activity.
No records of imports, exports, product details, or any related transactions were provided by the bank.
Unbelievable profit margins
Despite showing only Tk1 lakh in cash flow, Vista International reported a pre-tax net profit of Tk91.89 crore in 2024, an anomaly described as "unbelievable" by the central bank.
Similarly, with a cash flow of just Tk4 lakh, Sunstar Business Limited claimed a net profit of Tk79.13 crore.
Bangladesh Bank also flagged Glowing Construction’s profit projection of over Tk137 crore against a cash flow of just Tk2.85 crore.
Asset growth questioned
The asset value of Vista International surged from Tk77 lakh in FY 2022-23 to Tk92.66 crore in FY 2023-24, marking a staggering increase of 11,918%.
Skymark’s assets reportedly grew by 4,012.58%, while Glowing Construction saw an increase of 5,345%, figures which Bangladesh Bank has deemed highly irregular.
Directors’ loan repayment capacity
The directors of these companies have cited personal resources as the source of loan repayment.
However, Bangladesh Bank found no evidence to substantiate their claims.
Furthermore, no information was provided on the actual assets of the directors, leaving their ability to repay these enormous loans in doubt.
Bangladesh Bank also could not verify any business activities by the directors.
A senior official of IFIC Bank commented that not everything is within the control of bankers, as loan approvals, disbursements, and extensions are often controlled by the board.
The official added that these loans have largely benefitted Salman F Rahman and his family’s Beximco Group.
Dr Zahid Hussain, former lead economist at the World Bank’s Dhaka office, emphasised that such dubious loans were sanctioned with the knowledge of regulatory authorities and urged action against both the bank's management and relevant officials at Bangladesh Bank.
He lamented that a significant portion of the public’s savings has been looted, causing long-term damage to the economy.
"Had this money remained in the country, investments in industry and trade could have increased, boosting employment and production," he remarked.
