BB appoints auditor to People’s Leasing taking aim at restructuring
Bangladesh Bank (BB) has dispatched an auditor to the People's Leasing and Financial Services (PLFS) now in the process of liquidation for assessing the non-bank financial institution's actual assets and liabilities taking aim at restructuring the ailing company.
The central bank appointed Howladar Yunus & Co., the representative of the American audit firm Grant Thornton in Bangladesh to assess the NBFI's actual assets and liabilities after a meeting with the interested investors in PLFS on February 17.
Before the move, Shamsul Alamin Group, a real estate company and two other groups jointly applied to the finance ministry last year to invest in the non-bank Financial Institution (NBFI) including taking over the liabilities of company.
The finance ministry forwarded the letter to the central bank. Meanwhile, BB got approval from the High Court to restructure PLFS. However, the presence of three directors of Shamsul Alamin Group on PLFS board for ten years until 2015 has made the matter complex.
The group members have been accused of significant loan irregularities of the ailing NBFI, according to central bank findings. Alamgir Shamsul Alamin, who is also the president of the Real Estate and Housing Association of Bangladesh (REHAB) is the managing director of the business group.
"We sought a final proposal from the group as per the direction of the High Court," said a top official of the central bank seeking anonymity to publicly speak on the matter. In this case, the interested group wanted to know the actual assets and liabilities of the company.
"That's the reason for appointing an audit firm." Interested investors will submit their proposal for restructuring the financial organization within two months of the appointment of the audit firm, according to the BB official.
After receiving their final proposal, it will be restructured as per the direction of the High Court only if the BB is satisfied after examining the proposal. The liquidation process of PLFSL will continue until the restructuring process is finalised, he added.
"After completion of assessment by the audit firm, we will evaluate the actual assets and liabilities of the company and send a final proposal to the BBs," Alamgir Shamsul Alamin, managing director of Shamsul Alamin Group, told The Daily Observer.
So nothing can be said before the assessment by the audit firm, he added. The government also wants to restructure PLSF instead of liquidation as liquidation has already harmed the country's financial sector, said industry insiders.
In June 2019, the government directed the central bank to liquidate PLFS due to the deterioration of its financial health in the last several years. PLFS is one of the four NBFIs from which rogue banker Proshanta Kumar Halder, also known as PK Halder, swindled at least Tk 3,500 crore.