Indian Oil Corp has agreed to form an equal joint venture with Bangladesh’s Beximco LPG to set up a terminal to import liquefied petroleum gas in Bangladesh.
Indian Oil’s Dubai unit IOC Middle East FZE and Beximco’s holding company RR Holdings Ltd, Ras Al Khaimah, UAE have signed an agreement for LPG business in Bangladesh, as per a statement by Indian Oil.
This deal, likely to have been pulled off by Beximco by ‘relevant greasing of palms’ that is part of its corporate culture, has surprised those connected with National Security Set-Up in India.
How can Indian Oil sign such deal with checking on the security implications, a deal with a company run by a known Pakistani agent!
Because Indian intelligence has copious evidence about Beximco founder Salman F Rahman’s Pakistani connections — beginning with his joining the “Save Pakistan” movement in 1971, to marrying in Pakistan to getting his son educated there to employing large number of Pakistani ex-military and ISI officers in his organbsation to his strident lobbying after becoming PM adviser to resume diplomatic ties between Bangladesh and Pakistan.
Bangladesh Prime Minister Sheikh Hasina’s sudden desire to reach out to Pakistan through a 15 minute video conference with Prime Minister Imran Khan may not have surprised those who were privy to the red carpet welcome given to the new envoy from Islamabad earlier in July.
Since Hasina assumed power in Jan 2009, Pakistani diplomats have been pulled up on espionage charges and declared Persona Non Grata (PNG) at regular intervals. Often the main envoy have face been called over to the Bangladesh foreign ministry to face protest against Islamabad’s many actions like the passing of resolution in the Pakistan parliament denouncing the War Crimes trials .
Bangladesh agencies have gone hammer and tongs at Pakistan’s sponsored terror networks, both of the Islamist kind and the ethnic separatists from India’s Northeast. ISI-backed economic warfare using Bangladesh as a conduit for Fake Indian Currency Notes (FICN) has almost dried up after huge seizures in the Chittagong Port and the Pakistani agency’s source network seriously disrupted by tough Bangladesh action on the basis of Indian intelligence inputs.
Beximco Group vice chairman Salman F Rahman has been elevated to Private Industry and Investment Advisor to Prime Minister Sheikh Hasina during her second term — but why ?
The premier appointed him as her adviser for private sector industries and investment under rule 3B (i) of the Rules of Business, 1996, says a government circular.
The post is non-salaried but Rahman enjoys the status of a minister. In reality, he is the most powerful man in the Hasina administration, capable to getting efficient ministers, central bank governors, officials even in the military shot down at will. Salman F Rahman is the lawmaker for Dhaka-1. He was made Awami League private sector development advisor first in 2009.
He is the founder of the Beximco Group and is a former president of the Federation of the Bangladesh Chamber of Commerce and Industry (FBCCI).
That he is Pakistan’s Man Friday in a country that was carved out of Jinnah’s Dreamland after a bitter eight month civil war which led to 3 million Bengali deaths and quarter of a million Bengali women raped and molested has never been doubted in Bangladesh.
Recently, taking advantage of India-China border clashes, Rahman worked from behind the scenes to set up a red carpet welcome for the new Pakistan High Commissioner in Dhaka’s Foreign office in great secrecy — so much so that no press statement was issued by a normally hyperactive MOFA and no Bangladesh media outlet covered the story.
A stray piece by Turkish news agency Andalou Agency blew the lid on the secret bonhomie which comes as a surprise because it is the Sheikh Hasina’s government which has heavily cracked down on the ISI and even refused to accept credentials of Pakistani diplomats on charges that they were espionage agent.
Times have changed and with Rahman the undisputed king of the Bangladesh PMO, the Pakistanis can surely expect forgiveness even without tendering an apology for the 1971 genocide.
Is it not surprising that the Awami League, the greatest beneficiary of the anti-war crimes movement of the Ghatak Dalal Nirmul Committee, would, as the spearhead of the liberation war, turn its back on the 1971 legacy, when it comes to government policy and befriend Pakistan and China, the perpetrator and the supporter of the 1971 genocide.
It has really come full circle and nothing exemplifies this better than the rise and rise of Salman F Rahman despite all the huge controversies that he and his family is directly implicated with.
According to an article in New York Times, Beximco said that it owed US$800 million to Bangladeshi banks. An American embassy cable released by WikiLeaks described Salman F Rahman as “allegedly one of Bangladesh’s biggest loan defaulters”. The cable makes for interesting reading — because it provides Rahman’s extensive political links across the Awami League-BNP-Jamaat divide. “He has his eggs in all basket,” says a top business analyst but unwilling to be named for fear of physical retaliation.
Bank defaulters exist in India but they have to flee the country, not find a place as PM’s adviser.
“Salman’s elevation as PM’s adviser adds to Awami League’s necklace of shame,” said a senior AL leader, a veteran of 1971 Liberation War but now largely sidelined. “Our party will soon be AL (Salman)” he quipped.
Rahman was arrested for fraud by the military-backed interim government in 2008. Since 2009, the Bangladesh Bank has allowed Beximco to restructure its loan repayments. The group has alleged that the previous Bangladesh Nationalist Party government tried to target it for Salman F Rahman’s links’s with the Awami League. But that is a white lie. Rahman’s brother-in-law Morshed Khan, a former BNP minister, has looked after Beximxo’s and Salman’s interests rather well — so when Khan got embroiled in a recent case filed by Anti Corruption Case, he was whisked away to London in a private jet hired by the Rahman family , violating all Corona time regulations.
Stock manipulation
Beximco has faced accusations of being one of the 60 primary parties involved in the 2011 Bangladesh share market scam. According to the High Court’s judgment, no direct evidence had been found against any of the individuals or organizations accused in the case. But the judges who delivered the judgements under threats and inducement have all been found in possesion of huge assets well beyond their known sources of income within a few years after their retirement.
On Feb. 4, 2016 $101 million dollars of Bangladesh’s foreign exchange reserves were stolen from its account at the Federal Reserve in New York. The entire blame was laid on the Bangladesh Bank governor Atiur Rahman , overlooking the fact that such routine FedReserve-BB forex movement is supervised not by a Governor but by junior officials.
The real reason was different– Rahman has instituted and tried to develop a Financial Intelligence Unit which investigated two scourges of Bangladesh economy — bank bad debt and money laundering. On both count, Salman Rahman and his business conglomerate topped the list. And that seems to be his one real qualification to claim the position of an advisor in Bangladesh PMO, an absolute disgrace when one considers that the fastest rising economies of Asia has been shephered by a brilliant Finance Minister AMA Muhith and a more brilliant Bangladesh bank governor Atiur Rahman who has been awarded the best central banker several times.
“One set of brilliant men made money for Bangladesh, the poor working class of the nation trusted the leadership and parked their hard earned money in the national banking system and a small group of thugs robbed the country and parked all their money in safe tax havens abroad,” said Indian economist Indraneel Bhowmik, who follows the Bangladesh economy closely. Joseph Alluchin who wrote biggest expose on Bangladesh bank frauds has expressed similiar views.
It’s hardly the first time tens of millions of dollars have vanished from Bangladesh’s banks. The high-flying cyber scam at the Federal Reserve pales in comparison with the routine plunder of Bangladesh’s financial system, including by some of its purported guardians.
The country’s six state-owned commercial banks (SOCBs) control around one-quarter of all bank assets in the country but have on outsize influence on the economy thanks to their connections to the government. For example, SOCBs have “extremely high” rates of nonperforming loans, according to the I.M.F., and the average for the entire banking industry is “very high”: about 11 percent, compared with about 4 percent in advanced economies.
Part of the explanation for this is poor governance by the banks’ boards, but the main culprit is the country’s culture of patronage and the biggest beneficiary of the same — Salman F Rahman and his evil empire.
“He is a gonosatru(enemy of the people) if there was one ,” said a top Leftist politician.
“The Awami League projects Tarique as a top ISI agent but their very own Salman is the biggest ISI agent, ten times more effective than Tarique now,” the leader said, but on condition of anonymity fearing vendetta.
He said Salman’s rising influence is undermining the very secular ethos of Awami League and taking it to days when it was Awami Muslim League, with increasing tendency to compromise with hardcore fundamentalists in the name of tactics.
One of the most notorious of Bangladesh’s banking scandals involves the country’s largest SOCB, Sonali Bank. Between 2010 and 2012, one branch of Sonali Bank alone illegally gave out $454 million in loans, including nearly $344 million to Hallmark Group, a textile business, according to the Dhaka Tribune. Tanvir Mahmud, Hallmark’s managing director, connived with a branch manager to issue fraudulent letters of credit to fictitious companies.
Even after the scam was uncovered, Sonali Bank continued to operate with an extremely high nonperforming loan ratio: reportedly more than 37 percent in the fall of 2014. And the bank, along with Bangladesh’s other five SOCBs, are regularly recapitalized by the government — to the tune of about $640 million for fiscal year 2014 and, it is expected, more than $700 million for fiscal year 2015.
These banks’ irresponsible lending practices — and the state’s irresponsible efforts to systematically bail them out — are partly the result of collusion between business and political elites.
Fahmida Khatun, the research director at the Center for Policy Dialogue, in Dhaka, was a board member of the SOCB Janata Bank in 2008-11, after being appointed by the military caretaker government that ran the country in 2007-8. In an interview in Dhaka in 2014 she told me that since Bangladesh’s return to civilian rule after the 2008 election, loan portfolios have typically been assessed not according to their business potential, but with an eye toward “the influence or the connections of the person” asking for credit.
The New York Times went to the bottom of the huge bank frauds when it confronted Salman F. Rahman, one of Bangladesh’s wealthiest individuals and a co-founder of Beximco, a major business group that specializes in exports of pharmaceuticals and garments. A 2007 cable from the United States ambassador in Dhaka subsequently disclosed by WikiLeaks called Mr. Rahman “allegedly one of Bangladesh’s biggest bank loan defaulters.” He was imprisoned for fraud in 2007-8, under the caretaker government.
In an interview in his Dhaka office in 2008, Mr. Rahman told NYT he owed about $800 million to state-owned banks. He blamed the previous government, led by the Bangladesh Nationalist Party — a staunch rival of the Awami League, which is in power today — for not servicing his debts. By the time he was speaking to NYT, though, Mr. Rahman had become an adviser to Sheikh Hasina, the prime minister of Bangladesh and the president of the Awami League. And the Bangladesh Bank was now “restructuring” his debts.
Mr Rahman is no exception. Some $565 million in assets are said to have been looted from the state-owned BASIC Bank between 2009 and 2012, yet the scam’s suspected mastermind, a former chairman of the bank, wasn’t troubled by the anti-corruption commission investigating the fraud, reportedly thanks to his political connections. Banking in Bangladesh is beholden to the politicians.
This is largely because state institutions are underfunded and weak. Technocrats, auditors, courts — all those traditional safeguards don’t have enough authority or muscle in Bangladesh to keep the politicians in check.
This, in turn, is due to the fact that Bangladesh has one of the smallest tax-to-G.D.P. ratios in the world, at less than 10 percent. Lack of infrastructure prevents the collection of income taxes. There are myriad taxes on corporations, but it’s easy enough to bribe one’s way out of paying them. Partly as a result, imports are subject to exorbitant fees — which only give importers an incentive to finagle a way to avoid them.
Then there’s capital flight. If you loot state resources in a country like Bangladesh, you don’t want to risk losing it to someone else’s scams or to seizure by the government. And so you take the money abroad, far from the prying eyes of local tax collectors, preferably to a low-tax, low-transparency jurisdiction.
About $9.7 billion worth of illicit capital left Bangladesh in 2013 alone, up from $3.3 billion in 2004, according to the N.G.O. Global Financial Integrity. That’s the equivalent of more than 6 percent of G.D.P. that year, and more than 3.5 times what Bangladesh received in foreign development aid.
But analysts say Bangladesh’s corrupt political–business nexus may have allowed Salman Rahman to thrive, but what surprises many Indians is how could Delhi strike a deal of such magnitude with the company founded and run by a known Pakistani agent.