Money laundered thru terracotta tile export
A Jhenaidah-based firm, Exim, has exported clay terracotta tiles at costs much higher than the international market price.
The Tk 2 billion bill for the exported tiles is now not being paid. However, Bangladesh Commerce Bank, owned by government and private companies, had bought the bill and has already paid Tk 1.90 billion to Exim.
The four foreign banks which had sent the purchase order have no operations whatsoever in their own countries and are not even approved for the operations.
These banks are known as ‘shell banks’. Restrictions have been imposed globally against dealing with these banks.
The beneficiary of this money at home and abroad is Shahjahan Bablu, chairman of SB Punno Group.
According to the website of the group, Shahjahan Bablu is a business magnate of Bangladesh. He has five business establishments in Dubai and Singapore. Prothom Alo has confirmed the existence of his business establishments.
The money laundering investigation organisation, Bangladesh Financial Intelligence Unit (BFIU), has carried out an inquiry into the matter and said Shahjahan Bablu has laundered Tk 2 billion in the guise of business. He has also embezzled Tk 1.90 billion.
BFIU has sent letters to NBR’s VAT Audit, Intelligence and Investigation Directorate, the Criminal Investigation Department (CID) of police and the Anti-Corruption Commission (ACC) to take action against Shahjahan Bablu and the Commerce Bank officials who are involved.
BFIU chief Abu Hena Md Razi Hasan said, “It is our responsibility to inform the law enforcing agencies. Now it is their responsibility to take action.”
Prothom Alo staff correspondent in Jhenaidah said SB Exim has established factories in the BSCIC area of the town last September.
Managing director of the project, Golam Mohiuddin Faruk, said 150,000 tiles were made and 100,000 tiles have been exported.
Speaking to Prothom Alo, SB Group chairman Shahjahan Bablu said, “Around 10 million dollars of the export bill has been received and the rest will be sent by July. The money has been sent from the banks with which the buyers have connection. There is no problem.”
He also said that he has launched an outlet in Dubai with the money he earned as payment from a company in Qatar.
Purchase order at high price
Three companies in UAE gave orders to SB Group to purchase the terracotta tiles. Of the companies, Bangladeshis own two.
Bangladesh’s Mohammad Rafiuddin and Sabia Afrin are the proprietors of Handyware International General Trading. Mohammad Rafiuddin is also proprietor of Al Mawad General Trading.
According to bank documents, the two companies imported tiles from Bangladesh although they are registered to deal in leather items and animal fur.
Another company is Millstream Global General Trading. These three companies opened 72 LCs of Tk 3.50 billion in 2018 to import tiles.
The tiles SB Group export cost 10 dollars per piece.
According to the investigation, the price of a tile was shown ten to one hundred times higher in the export bill in order to get an inflated payment from the bank.
Commerce Bank obtained Letter of Credit (LC) from four foreign banks to buy the tiles from SB Exim. Those four banks cannot operate in their own countries and they don’t have any branches there either. No central banks have any control over such banks which are known globally as ‘shell banks’.
The global anti-money laundering body financial action taskforce (FATF) guidelines strictly prohibit any transaction with shell banks. Bangladesh Bank has also strong directives against shell banks.
Suisse Credit Capital, one of the four banks, was registered in UK as ‘Kim Capital’ in 2009 but is no longer registered since 2018. This institute had shifted their location 8 times and changed names three times within this period. Yet this institution provided the LC.
And ‘Point Bank’ is not even a bank with capital of only £100. Euro Exim Bank is registered in St Lucia of Caribbean Island and Pan Pacific Bank in Gambia. Neither of two banks have any operations in their own countries.
Payment of 65 bills has been received but the payment of the remaining 209 bills is yet to come, although there is a stipulation that profit should enter the country within four months of export.
Money came from Dubai
Analysing records of SB Exim, BFIU has found out that the UAE company opened an LC but the goods were exported to UK and the US, and export money was paid from Dubai. This indicates that all the rules of international business have been violated. Export should be made to the country where the LC was opened. Export payment has to be made from the same country.
Some 65 bills came from Dubai’s Abu Dhabi Commercial Bank. The payments have been made using Swift code 202 so that information of sender remains hidden.
Businesses in Dubai and Singapore
According to SB Punno Group’s website, they have at least five different types of businesses in Dubai and Singapore. The company has sister concerns named Punno Jewellery in Dubai, Punno Foodstuff Trading and Punno General Trading in UAE. In Singapore, they have business concerns named ‘Punno Gold and Diamond PTE LTD’ and ‘Punno Supermarket PTE LTD’.
According to the Singapore Business Directory, Punno Gold and Diamond was registered on 2 August 2018. Punno Supermarket got license on 3 March 2017. It was formerly known as PIU TRADING PTE. Ltd. Offices of both the companies are at Grandview Suites in Geylang. SB Group is not among the listed companies in Bangladesh which are allowed overseas investment.
What stakeholders say
BFIU investigation said that records of SB Exim’s export bill documents had clearly mentioned that the client is a defaulter. The then managing director of Commerce Bank Securities RQM Forkan, additional managing director Zafar Alam and deputy managing director Kazi Reazul Karim gave a nod to purchase the bill. QM Forkan is currently the MD of Commerce Bank Securities.
The current MD and CEO Abdul Khaleque Khan, and the additional MD and DMD on Sunday said that the client has brought back Tk 1.1 billion and Tk 43 million has been repaid.
Kazi Reazul Karim said, “We didn’t purchase the bill of any shell bank. These banks have global reputation.”
Former deputy governor of Bangladesh Bank Khondkar Ibrahim Khaled said that the client has used a new trick for money laundering and embezzlement.
How could the bank purchase bill of goods imported for such a high price, he asked.
* This report, originally published in Prothom Alo print edition, has been rewritten in English by Rabiul Islam and Galib Ashraf.