BANGLADESH

Even as the probable date for signing a memorandum of understanding with Malaysia on the Padma bridge project funding has been finalised, the finance minister would not yet rule out the possibility of funding by the World Bank-led donor agencies.

"The Malaysian government has expressed its interest in constructing the Padma bridge project. The MoU might be signed on Apr 10. But there're no condition as such to cancel agreements with the World Bank and other donor agencies if the MoU is signed with Malaysia," Abul Maal Abdul Muhith said at an interview with on Saturday.

The finance minister said signing of an MoU for something is merely an expression of mutual interest by the parties concerned and there are several steps to follow. "What exactly they want to do regarding the Padma bridge, what we want... all this is yet to be finalised," he said.

"How can we (the government) cancel the agreement with the World Bank now?" he asked.

It has not been finalised yet how much the Malaysian government would contribute to the project, he added.

"MoU is going to be signed with Malaysia, let it happen. We will continue our talks to resolve the deadlock with the World Bank," Muhith said.

"We will take necessary decisions needed at right time."

Communications minister Obaidul Quader is scheduled to go to Malaysia on Sunday night to sign the MoU.

The Malaysian government had earlier said the MoU signing on the Padma bridge with Bangladesh would take place on Feb 21.

The Malaysian cabinet has already approved financing for the project in principle.

The communications minister told newsmen on Saturday, "I'm going to Malaysia on Sunday. MoU is likely to be signed."

He added that it is merely "first phase of the agreement".

In last October, the global lender had suspended a $1.2-billion loan to the government for the $2.9-billion mega project alleging corruption.

Apart from the World Bank, Asian Development Bank (ADB) has pledged $610 million, Japan International Cooperation Agency (JICA) $400 million and Islamic Development Bank $140 million as loan for construction of the bridge.

The Anti Corruption Commission, however, on Jan 2 said its investigation found no tangible evidence of corruption in the Padma project. The anti-graft body also claimed that it did not find any proof of corruption against then communications minister Syed Abul Hossain.

Hossain was shifted to the newly-created information communication technology (ICT) ministry last year amid the allegations.

Last week, the World Bank, after probing the alleged irregularities in the bidding for Bangladesh's biggest infrastructure project, temporarily suspended a unit of the Canadian company SNC-Lavalin from participating in tenders of WB-funded projects.

Within hours of a parliamentary standing committee proposing formulation of a law to regulate multilevel marketing (MLM) business, the central bank on Sunday warned people against investing in unapproved banking institutions.

In a media statement signed by managing director AFM Asaduzzaman, the Bangladesh Bank cautioned investors not to be swayed by abnormally higher rates of interest offered by 'some institutions'.

"It is to notify all that some institutions under different 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 profit," read the statement.

"As making investments in those institutions not approved by appropriate authorities increases the possibility of being deceived, people are being requested to abstain from going for any financial transaction with those institutions," the statement added.

The central bank notice came amid reports of illegal banking by Destiny 2000 Ltd published in various newspapers over the last few days.

Earlier in the day, the parliamentary standing committee on commerce ministry decided to request the finance minister and the central bank governor for action against Destiny-2000 Ltd-like MLM companies.

"Such companies are swindling people out of millions of taka. We will write to the finance minister and Bangladesh Bank for stopping illegal banking and businesses. We will request for immediate action," said ABM Abul Kashem, chairman of the standing committee.

On Mar 6 last year, then commerce minister Muhammad Faruk Khan had said a law was underway to bring the MLM companies within the legal framework.

There are 62 registered MLM companies operating Bangladesh, Faruk Khan had said.

He had told journalists that only Destiny has 4.5 million clients. Another prominent MLM company is Unipay-2 U.

With regard to rising controversy against Destiny 2000, finance minister Abul Maal Abdul Muhith on Sunday said that action would be taken against the company if the ministry of commerce and Bangladesh Bank make such a recommendation.

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.