BANGLADESH

The government is considering initiating action against Destiny-2000 Ltd 'to protect people from deception', finance minister A M A Muhith said on Saturday.

"A commission like the one on Jubok will be formed to bar assets transfer by such firms," Muhith told reporters at his office.

Muhith's remarks followed recent newspaper reports on 'illegal banking' by Destiny Group.

"Media reports on Destiny are alarming," he said. "The government can't keep sitting and watching the situation."

"Jubok couldn't transfer all assets as its properties were confiscated. This will help in compensating its clients to some extent. A similar commission will be formed to look into this (Destiny) case also," he said.

The minister informed that the finance and commerce ministries and other related departments have already started working to form the commission.

Jubo Karmasangsthan Society, better known as Jubok, was found indulging in illegal banking by a central bank investigation in July 2006. It was asked to repay Tk 1 billion it owed to its depositors.

Jubok was listed as a 'society' with the Registrar of Joint Stock Companies.

A few days back, the parliamentary standing committee on commerce ministry had decided to request the finance minister and the central bank governor for action against Destiny 2000 Ltd-like multi-level marketing (MLM) companies.

Following the parliamentary watchdog's move, the Bangladesh Bank on Apr 1 issued a statement warning people against investing in unapproved banking institutions.

"It is to notify all that some institutions under various names are operating like banks in various districts across the country. They are collecting money from people by promising an abnormally higher rate of interest and profits," said the central bank statement.

62 REGISTERED MLM COMPANIES

On Mar 6 last year, then commerce minister Muhammad Faruk Khan had said there are 62 registered MLM companies operating in Bangladesh.

He had told parliament that only Destiny has 4.5 million clients and that other MLM companies have fewer clients. Another prominent MLM company is Unipay-2 U.

The government is 'disturbed' to see the media reports on Destiny, the finance minister said on Saturday.

Two weeks ago, the central bank sent a report on Destiny to the finance ministry. The report alleged that Destiny-2000 is conducting illegal banking.

LAW ON MLM COMPANIES

Muhith went on to say the government has taken steps to formulate a law to bring MLM business under a legal framework.

The government took steps to formulate the law after clients of another prominent MLM company, Unipay-2 U, took to the streets in 2010 following allegations of deception by the company.

A commerce ministry official, requesting anonymity, told that they have already finalised a draft of the law but could not it present before the cabinet due to some objections by the public administration ministry.

"The draft proposes to form a directorate and appoint staff there. But the public administration ministry is not giving its clearance to the manpower recruitment clause. So, the draft hasn't been presented to the cabinet," he said.

JUBOK CLIENTS YET TO BE PAID BACK

Hapless clients of Jubok are yet to be repaid though six years have gone by since the MLM company was shut.

The central bank asked the company to stop illegal banking and pay back its depositors by March 2006. But as it failed to repay its clients within the stipulated time, the government shut its operations.

After the current government assumed office, a commission headed by former central bank governor Mohammed Farashuddin was formed to make proposals on Jubok and how to repay its clients.

The commission recommended selling off Jubok's assets to make the repayment and also suggested forming a permanent commission to keep a tab on such incidents.

Following the proposal, the government formed a permanent commission headed by former joint secretary Rafikul Islam. But the Jubok clients are yet to get their money back.