Bangladesh: 77 cos with Tk 289cr EEF loan traceless, reveals BIDS study

Dhaka, July 18, 2014 (New Age): There is no trace of at least 77 companies which borrowed capital amounting to Tk 289 crore from Equity and Entrepreneurship Fund of Bangladesh Bank, a recent survey of Bangladesh Institute of Development Studies (BIDS) revealed. Bangladesh Bank, however, on Thursday contested the BIDS survey saying only six companies were traceless after embezzling funds from the EEF. According to the BIDS report, the BB and the ICB sanctioned capital to 166 companies of which the BIDS survey team did not find any project offices of 77 companies at their referred places in accordance with their equity proposals submitted to the central bank and Investment Corporation of Bangladesh. Bangladesh Bank officials told New Age that the political activists patronised by the government siphoned out the money from the EEF having low interest rate. The fund was created in FY 2000-2001 to patronise them (political activities). The BIDS has recently conducted a field survey on the utilisation of the EEF and the research organisation feared that the disbursed fund for 77 companies might not be refunded. The BB and the ICB are jointly conducting the EEF operation. The BB has already taken legal action against the six companies to recover the fund, BB executive director Dasgupta Asim Kumar told reporters at a press briefing at the central bank headquarters in the capital. The six companies of Information and Communication Technology sector are Dreams Soft Ltd, Intersepts Software Services Ltd, Jupiter IT Ltd, Marphee Mccann Consulting Ltd, Information Technology Matrix Ltd and Resource Technology Ltd. The ICB and the BB disbursed Tk 3.25 crore against the sanctioned equity amounting to Tk 6.03 crore to the six companies, according to a BB report. The BIDS report said that the non-existing 64 out of the 77 companies had promised in their proposal papers that they would invest the fund in the agriculture sector and rest of the companies would make investment in the ICT sector. Asim Kumar, however, claimed that 77 companies except six companies under the ICT sector had actually changed their address resulting that the BIDS survey teams did not find them out. The agriculture-based companies have no scope to embezzle the money from the EEF as they have to register their lands with the land office against the projects, he said. When asked whether the EEF was sanctioned on the basis of political consideration, he said that a number of political leaders and activists had gained the fund, but the BB sanctioned the capital by scrutinising their proposals. BIDS research director Zaid Bakht told New Age that the companies, which took equity from the EEF, should have informed the BB about the relocation of their project offices. ‘The 66 companies did not inform the central bank about their office shifting. Besides, the BIDS survey teams also unearthed that some companies had no projects at their referred places’, he said. The government created the EEF in the FY2001 with an initial capital of Tk 100 crore. The government allocated Tk 2,700 crore between the FY 2000-01 and the FY 2013-14 of which Tk 1,825 crore was disbursed. The BB and the ICB has so far granted the fund to 1,443 projects. Investors of Agriculture and ICT sector can apply for the fund with zero interest rate from the EEF. The tenure of the repayment of the fund is eight years.