Over Taka 400,000 crore skimmed out
The scars of the Padma bridge bribery scandal have not yet healed. Now a composite scandal some 1500 times the size of the alleged loot in Padma Bridge negotiations is in the process of exposure. It may very well put Bangladesh back again on top of the Transparency International’s annual Corruption Perception Index (CPI). The December 2011 CPI placed Bangladesh slightly below the top.
An exclusive investigation has found that in four major public-run sectors alone, corruption rackets had embezzled over 400,000 crore taka in routine dealings over the last few years. The concerned sectors are banking, telecommuni-cation, energy and education. The recently exposed Sonali Bank- Hallmark scam that provoked loud public outcry pales indeed in comparison with the quantum of corruption found in other public sector entities.
Topping the list is the telecom sector, with an estimated 151,000 crore taka irregularities since June 2009, followed by the energy sector where kickback in feigned system loss and over billing by quick-rental power plants and energy deals tallies up to Taka 140,000 crores. Monthly Pay Order (MPO) related corruption in the education sector accounts for another 111,000 crores taka.
The revealing data comes from a team of private investigators who are gathering evidence from a number of reliable sources. “Much more is on the way,” said a member of the investigating team.
According to the team’s estimation, the Sonali Bank scam involves over Taka 5,000 crore. The exact amount of loss from improper transactions in the Hallmark scandal is taka 3,699 crore 53 lacs; discovery of similar irregularities involving taka 1400 crores loaned to 14 other business corporations having close relationship with high-ups in the government accounts for the rest. The anomalies have been corroborated in an audit by a Chartered Accountant Firm, Saiful Shamsul Alam & Company.
Auditors have unearthed another major embezzlement in Bangladesh Krishi Bank, involving Taka 157 crores that were siphoned away under phoney loan schemes in favour of ruling party loyalists masquerading as businessmen.
Most revealing is the corruption in the telecom sector, commandeered and regulated by the sole discretion the Bangladesh Telecommunication Regulatory Commission (BTRC). Investigators found evidence of underhand dealings in the transfer in early 2011 of 70 per cent shares of the Warid Telecom to the Airtel. Using Airtel as the front, majority of the transferred shares were in fact vested in the name of a close relative of a senior political leader of the country. The deal also illegally waived taka 4 billion transfer fee and deprived the public exchequer of that bounty.
In March, corruption marred the $10 million consultancy deal with the US-based Space Partnership International, which was chosen by the government by rejecting a contender with better scores in technical ability to launch the country’s first space satellite. Besides, massive discrepancies were discovered in the data and records obtained from the state-owned Bangladesh Telecommunication Company Limited (BTCL), covering March 2011 to March 2012, involving Voice over Internet Protocol (VoIP) operations. The scam milked over taka 100 crore from 45,000 call terminations during that period. When the discrepancy was detected, the Managing Director of the BTCL escaped grilling and any punitive action, being protected by government and top BTRC bosses and political connections.
The Finance Ministry and the Home Ministry had assured the Press, when strong public pressure blew up over the Hallmark scandal, that none of the suspect wrong-doers of the lending bank and the borrowing companies will be allowed to leave the country. But meanwhile, the Sonali Bank Managing Director, Prodip Kumar Dutta, had already flown out of Bangladesh.
The investigators also discovered that a team of BTRC officials have pocketed large kickbacks by allowing a number of phone companies to tamper records and evade taxes by showing lesser number of customers. But these are peanuts compared with the hefty kickback—estimated to be Taka 60,000 crores - that has changed hands while nominating the three Interconnection Exchanges (ICX), 22 International Gateways (IGW), and a host of International Terrestrial Cable (ITC) by the BTRC. These deals needed prior commitment to and blessings from senior political leaders in power.
Soumen Sengupta, son of minister Suranjit Sengupta, is one of the ICX licensees. He disclosed, under interrogation on April 26, that the fund he used to obtain the ICX license came from his friends. The deceptive narrative seems to have unhinged Mr. Sen (jr), at least temporarily, from the hook, although his father’s bribery scam is still spreading toxic stinks. The most odious is the cabal’s attempt to circumvent a fair investigation.
What else could explain how the main witnesses of that scam, the driver of the car and the concerned APS of the minister as well as the GM of the railway, have all vanished from the scene. This happened despite the fact that both the driver (the whistle-blower) and the APS (the main suspect along with the GM) having been arrested on April 9 by members of the Border Guard Bangladesh (BGB) red handed with taka 70 lakh cash in the vehicle.
The minister and his political patrons did their best to cover up the matter: of bribe money, yielding at last to the demand for the minister’s resignation from the ministry pending inquiry on April 16. Mr. Sen, however, continues to hold a cabinet portfolio as a minister without a ministry.
The investigators found that the most covetous fountain of ill-gotten money is the VoIP network. Following repeated exposures of corruption in this immoral scheme, the ACC dispatched letters in May to six major cell phone operators demanding information regarding illegal VoIP activity emanating from ISD calls channelled through BTCL’s ICX and IGW (International Gateway). A senior ACC official, insisting on anonymity, confirmed how the investigation was evaded, and blamed sharing of illicit collections, and collusion between BTCL and cell phone operators as the crux of the problem.
Although much of the corruptions in the energy sector remain covered beneath the surface, the investigation reveals approximately one half of the total system losses (amounting to an estimated $200 million loss to the public exchequer) incurred by Bangladesh Power Development Board (BPDB) and the Dhaka Electricity Supply Authority (DESA) are due to falsified meter reading and bribing.
The sector is replete with other hidden transactions of hefty sums, often exchanged in foreign currencies. All 53 contracts for executing 55 power projects, with or without tenders, since coming to power of the AL-led regime in early 2009 remain shrouded by total lack of transparency, and bear signs of naked nepotism or huge bribe payments in advance. Evident signs are there also of cartel formation limited to family or political connections. For instance, the country’s single largest power producer, Summit Group, belongs to the family of an incumbent cabinet minister while other deals are linked with family members of senior ruling party political leaders. The Orion Group is another crony beneficiary that has recently been awarded contracts to install three private coal-based power plants of dubious viability purported to add 1088MW power to the national grid.
Investigators also made a stunning discovery of a $50 million bribery scam in a recent deal between India’s Reliance Group and one of the major power producers in Bangladesh. The deal is said to have been fixed by commitment in advance of a large sum of facilitation money for an expatriate relative of a senior politician who brokered the deal.
Education sector corruption has assumed archetypical currency. Since the inception in 1981 of the Monthly Pay Order (MPO) system, thousands of crores of takas from the myriad of educational institutions have been collected by rent-seeking local politicians and education ministry officials. Members of Parliament have been made chairman of all educational institutions in their respective constituencies. Rent-seeking for all matters, from recruitment of teachers, recommendations for government subsidies, purchase of books and other articles, etc. have been covertly institutionalised under the regime.
Amidst routine monthly bribe coming to the Directorate and the concerned ministry from the 28,000 non-government secondary schools, madrasas and colleges under the existing MPO-list, the quantum of illicit collection outweighs the taka 5,000 crore siphoned out annually from the public exchequer on the MPO outlet.
The Padma Bridge bribery or attempted bribery scandal led to the investigation of sources of inexplicable wealth displayed by some Bangladeshi expatriates with high connections in the ruling party of Bangladesh. It was only the tip of an iceberg of corrupt practices, which are coming to limelight one after another.
Holiday
The scars of the Padma bridge bribery scandal have not yet healed. Now a composite scandal some 1500 times the size of the alleged loot in Padma Bridge negotiations is in the process of exposure. It may very well put Bangladesh back again on top of the Transparency International’s annual Corruption Perception Index (CPI). The December 2011 CPI placed Bangladesh slightly below the top.
An exclusive investigation has found that in four major public-run sectors alone, corruption rackets had embezzled over 400,000 crore taka in routine dealings over the last few years. The concerned sectors are banking, telecommuni-cation, energy and education. The recently exposed Sonali Bank- Hallmark scam that provoked loud public outcry pales indeed in comparison with the quantum of corruption found in other public sector entities.
Topping the list is the telecom sector, with an estimated 151,000 crore taka irregularities since June 2009, followed by the energy sector where kickback in feigned system loss and over billing by quick-rental power plants and energy deals tallies up to Taka 140,000 crores. Monthly Pay Order (MPO) related corruption in the education sector accounts for another 111,000 crores taka.
The revealing data comes from a team of private investigators who are gathering evidence from a number of reliable sources. “Much more is on the way,” said a member of the investigating team.
According to the team’s estimation, the Sonali Bank scam involves over Taka 5,000 crore. The exact amount of loss from improper transactions in the Hallmark scandal is taka 3,699 crore 53 lacs; discovery of similar irregularities involving taka 1400 crores loaned to 14 other business corporations having close relationship with high-ups in the government accounts for the rest. The anomalies have been corroborated in an audit by a Chartered Accountant Firm, Saiful Shamsul Alam & Company.
Auditors have unearthed another major embezzlement in Bangladesh Krishi Bank, involving Taka 157 crores that were siphoned away under phoney loan schemes in favour of ruling party loyalists masquerading as businessmen.
Most revealing is the corruption in the telecom sector, commandeered and regulated by the sole discretion the Bangladesh Telecommunication Regulatory Commission (BTRC). Investigators found evidence of underhand dealings in the transfer in early 2011 of 70 per cent shares of the Warid Telecom to the Airtel. Using Airtel as the front, majority of the transferred shares were in fact vested in the name of a close relative of a senior political leader of the country. The deal also illegally waived taka 4 billion transfer fee and deprived the public exchequer of that bounty.
In March, corruption marred the $10 million consultancy deal with the US-based Space Partnership International, which was chosen by the government by rejecting a contender with better scores in technical ability to launch the country’s first space satellite. Besides, massive discrepancies were discovered in the data and records obtained from the state-owned Bangladesh Telecommunication Company Limited (BTCL), covering March 2011 to March 2012, involving Voice over Internet Protocol (VoIP) operations. The scam milked over taka 100 crore from 45,000 call terminations during that period. When the discrepancy was detected, the Managing Director of the BTCL escaped grilling and any punitive action, being protected by government and top BTRC bosses and political connections.
The Finance Ministry and the Home Ministry had assured the Press, when strong public pressure blew up over the Hallmark scandal, that none of the suspect wrong-doers of the lending bank and the borrowing companies will be allowed to leave the country. But meanwhile, the Sonali Bank Managing Director, Prodip Kumar Dutta, had already flown out of Bangladesh.
The investigators also discovered that a team of BTRC officials have pocketed large kickbacks by allowing a number of phone companies to tamper records and evade taxes by showing lesser number of customers. But these are peanuts compared with the hefty kickback—estimated to be Taka 60,000 crores - that has changed hands while nominating the three Interconnection Exchanges (ICX), 22 International Gateways (IGW), and a host of International Terrestrial Cable (ITC) by the BTRC. These deals needed prior commitment to and blessings from senior political leaders in power.
Soumen Sengupta, son of minister Suranjit Sengupta, is one of the ICX licensees. He disclosed, under interrogation on April 26, that the fund he used to obtain the ICX license came from his friends. The deceptive narrative seems to have unhinged Mr. Sen (jr), at least temporarily, from the hook, although his father’s bribery scam is still spreading toxic stinks. The most odious is the cabal’s attempt to circumvent a fair investigation.
What else could explain how the main witnesses of that scam, the driver of the car and the concerned APS of the minister as well as the GM of the railway, have all vanished from the scene. This happened despite the fact that both the driver (the whistle-blower) and the APS (the main suspect along with the GM) having been arrested on April 9 by members of the Border Guard Bangladesh (BGB) red handed with taka 70 lakh cash in the vehicle.
The minister and his political patrons did their best to cover up the matter: of bribe money, yielding at last to the demand for the minister’s resignation from the ministry pending inquiry on April 16. Mr. Sen, however, continues to hold a cabinet portfolio as a minister without a ministry.
The investigators found that the most covetous fountain of ill-gotten money is the VoIP network. Following repeated exposures of corruption in this immoral scheme, the ACC dispatched letters in May to six major cell phone operators demanding information regarding illegal VoIP activity emanating from ISD calls channelled through BTCL’s ICX and IGW (International Gateway). A senior ACC official, insisting on anonymity, confirmed how the investigation was evaded, and blamed sharing of illicit collections, and collusion between BTCL and cell phone operators as the crux of the problem.
Although much of the corruptions in the energy sector remain covered beneath the surface, the investigation reveals approximately one half of the total system losses (amounting to an estimated $200 million loss to the public exchequer) incurred by Bangladesh Power Development Board (BPDB) and the Dhaka Electricity Supply Authority (DESA) are due to falsified meter reading and bribing.
The sector is replete with other hidden transactions of hefty sums, often exchanged in foreign currencies. All 53 contracts for executing 55 power projects, with or without tenders, since coming to power of the AL-led regime in early 2009 remain shrouded by total lack of transparency, and bear signs of naked nepotism or huge bribe payments in advance. Evident signs are there also of cartel formation limited to family or political connections. For instance, the country’s single largest power producer, Summit Group, belongs to the family of an incumbent cabinet minister while other deals are linked with family members of senior ruling party political leaders. The Orion Group is another crony beneficiary that has recently been awarded contracts to install three private coal-based power plants of dubious viability purported to add 1088MW power to the national grid.
Investigators also made a stunning discovery of a $50 million bribery scam in a recent deal between India’s Reliance Group and one of the major power producers in Bangladesh. The deal is said to have been fixed by commitment in advance of a large sum of facilitation money for an expatriate relative of a senior politician who brokered the deal.
Education sector corruption has assumed archetypical currency. Since the inception in 1981 of the Monthly Pay Order (MPO) system, thousands of crores of takas from the myriad of educational institutions have been collected by rent-seeking local politicians and education ministry officials. Members of Parliament have been made chairman of all educational institutions in their respective constituencies. Rent-seeking for all matters, from recruitment of teachers, recommendations for government subsidies, purchase of books and other articles, etc. have been covertly institutionalised under the regime.
Amidst routine monthly bribe coming to the Directorate and the concerned ministry from the 28,000 non-government secondary schools, madrasas and colleges under the existing MPO-list, the quantum of illicit collection outweighs the taka 5,000 crore siphoned out annually from the public exchequer on the MPO outlet.
The Padma Bridge bribery or attempted bribery scandal led to the investigation of sources of inexplicable wealth displayed by some Bangladeshi expatriates with high connections in the ruling party of Bangladesh. It was only the tip of an iceberg of corrupt practices, which are coming to limelight one after another.
Holiday
