Report on:

Major corruptions of the Bangladesh Awami League in the last Five Years regime".

(From 2009-2013)

2

Table of Content

Content: Page:

Executive summery …………………………………………………………….4

Introduction…………...…………………………………………………………… 5

Incidence One: Padma Bridge Corruption …………………………… 6

o The Bridge ……………………………………………………….……..……6

o Funding for the Bridge ……………………………………………… 8

o World Bank ceased funding alleging corruption in high-ups

……………………………………………………. ……...8

o The official response from government ………………………..10

o Involvement of Syed Abul Hossain ……………………………….10

o SNC -Lavalin’s involvement in corruption …………………….12

Incidence Two: Hallmark stings and obsession of government: 14

o Beginning of the story ………………………………………………. ..14

o Involvement of Bank stuffs: ………………………………………… 15

o Role of Finance Ministry …….……………….………………………. 16

o Involvement of the Prime minister’s adviser ……...………….17

o Stuffs suspended and Charge sheet filed……………………..…18

o Recovery of money. ……………………………………………………. 19

o Impact on the banking sector………………………………………. 20

Incidence Three: Share market scandal. ……………………………… 21

o Why so many investors? ……………………………………………... 21

o History of stock market crash ……………………………………... 22

3

o STOCK MARKET CRASH OF BANGLADESH IN 2010-11: ..24

o Root of BUBBLE ………………………………………………………… 25

o Probe committee ………………………………………………….…… 28

Incidence Four: Corruption in Railway Ministry ………………….30

o Resignation of Minister ……………………………………………....30

o Reappearance of the fraudulent in the cabinet …………….31

o Like father like son ………………………………………………… ... 32

Incidence Five: Income climb of MPs………………………………….. 33

o Income escalation of MPs of Awami League government 33

o General growth of income status …………………………………34

o Individual income growth …………………………………………..34

Incidence Six: Rana Plaza: an example of failed governance: .40

o Who is this Sohel Rana? ………………………………………………41

Incidence Seven: Corruption sweeping in Universities: ……….43

o Case # 1: BUET in Crisis…………………………………………..….43

o Background breach of VC S M Nazrul Islam………………… 44

o Commencement of strike in BUET ………………………………44

o Counter action from VC……………………………………….………45

o Student’s reaction…………………………………………………….…46

o Case #2:Jahangirnagar University: another example of

Partisan Autocracy……………………………………………………..47

o Allegations and Accusations against VC Shariff …………..47

o Resigning of Dr. Anwar Hossain ………………………………...48

Conclusion ………………………………………………………………………..49

4

Executive summery

Incitements for historical changes in Indian sub-continent have been corruption and

misappropriation of ruling class over the ruled. Immoral attitude within high-ups of then

Sultans permitted the invasion of East-Indian Company and it was the same British rulers

who had to step down against demonstration of agitating mass against them. Then again

in 1971, people of Bangladesh stood up against corrupt and pervert Pakistani rulers for

justice and transparency. But yet after more than 40 years of independence, justice and

fairness is still a delusion for the people. In the following segments of this report, some of

the major corruptions of ruling Awami League government have been exposed given the

size and gravity of loss that the whole country has gone through. Incidences like,

Grameen Bank fiasco, Chhatra league barbarism, rental power plant robbery, Hajj-

chartered aircraft-Biman corruption, high prices of essentials have been vastly red-hot

issues over the last few years in political arena. However, only the Padma Bridge

scandal, Railway scam, piling of personal income by MPs, embezzlement of bank money

by Hallmark, Rana Plaza collaps and corruption within administrative body of reputed

Universities are covered in this report.

5

Introduction:

“The business of the government is to keep the government out of business-that is, unless

business needs government aid”- Will Rogers

The overall performance of the 14 party alliance government perfectly synchronizes with

the above quotation of Will Rogers. In developing countries like Bangladesh,

centralization of public sector becomes source of coercion and helm of corruption. As a

result, the concept of ‗good governance‘ is compromised with ‗good enough governance‘

by policy thinkers.

The grand alliance government made mistakes in every step it took since it came to

power. It did not learn from the two years long regime of Mainuddin and Fakhruddin. It

did not learn from its own mistakes either which it made after coming to power. Elections

of December 2009 raised high expectations, as strong stance against corruption was one

of the five key electoral pledges of the ruling alliance led by the Bangladesh Awami

League. The Right to Information Act was passed, which was subsequently followed by

the Whistleblower Protection Act, adopted in June 2011. However, the parliament soon

became a monopolized territory of the ruling alliance as the opposition started boycotting

it on grounds that could be easily addressed by government given the political will.

Political corruption is widespread in Bangladesh: citizens perceive political parties (62%)

and the Parliament (40%) as some of the most corrupt institutions of their country

6

(Transparency International). In recent Corruption Perception Index (CPI) released

globally by Transparency International, Bangladesh ranked 16th from the bottom. This

year Bangladesh has been ranked 136th among 177 countries.

According to executive director Dr Iftekharuzzaman of Transparency International

Bangladesh (TIB), the stock market, Padma bridge project, Hall Mark, Destiny, railway

and Rana Plaza collapse significantly overshadowed Bangladesh‘s profile this year in

CPI. Dr Iftekharuzzaman further added that, making the Anti-Corruption Commission

toothless, ineffective parliament, parliamentary committees dominated by interest groups,

whitening of black money and government‘s failure to effectively fight corruption added

to this poor profile.

7

Incidence One: Padma Bridge Corruption

One of the five top strategic features of the

government's election manifesto was a very

uncompromising stance against corruption.

After the cancellation of funding by World

Bank, the challenge that the government faces

today is deeply regrettable, embarrassing and

disappointing. An enormous amount of ink has

been spilled over the Padma Bridge controversy. It not only deprives a large number of

populations from comfortable transportation, but also dispels image as well as access for

funding from other donors. Corruption that spilled into all the roots of government in last

five years popped up in international arena through Padma Bridge scandal by high-up

government officials.

Implementation of Padma Bridge was a top priority election pledge of the present 14

party alliance Government. The fiasco even at the very starting point the implementation

of the project meant a lot to the legitimacy of present government‘s image both nationally

and internationally for good governance.1

1 http://www.ebangladesh.com/2012/07/12/curious-case-of-padma-bridge-financing/

8

The Bridge:

The Padma Bridge2 is a multipurpose road-rail bridge across the Padma River to be

constructed in Bangladesh. When completed it will be the largest bridge in Bangladesh

and the first fixed river crossing for road traffic. It will connect Louhajong, Munshiganj

to Shariatpur and Madaripur, linking the south-west of the country, to northern and

eastern regions. The project covers three districts — Munshiganj (Mawa Point/North

bank), Shariatpur and Madaripur (Janjira/South bank). The total area of land to be

acquired and required for its components is 918 hectares. The project will include

6.15 km long and 18.10 m wide bridge,15.1 km of approach roads, toll plazas and service

areas.

Details of the proposed project:

The proposed Padma Multipurpose Bridge Project is to entail3:

• Construction of approach roads and a 6.15 km long two level bridge across the

Padma River (USD 1,626.2 million).

• Construction of 13.5km of ―river training works‖ to ensure the stability of the

Padma‘s banks (USD 799.9 million).

2 http://en.wikipedia.org/wiki/Padma_Bridge

3 World Bank. 2011. Project Appraisal Document on a Proposed Credit in the Amount of SDR 779.3 Million to the People’s Republic of Bangladesh for a Padma Multipurpose Bridge Project. Report No. 56512-BD. World Bank.

9

• Implementation of social action and environmental management plans, such as

resettling affected populations (USD 291.9 million).

• Other technical assistance, monitoring, evaluating, and capacity building activities

(USD 98 million).

Anticipated benefits: The expected benefits of the bridge as laid out in the World

Bank‘s Project Appraisal Document are substantial:

The primary beneficiaries of the bridge would be the 30 million residents of the

country‘s southwest. The region is currently dependent on ferry services to

connect to Dhaka and ferry docks are at times left inoperable.

The Padma Bridge would not only offer a means for vehicles to cross the river,

but it would also include a railway and a conduit for telecommunications,

electricity, and natural gas transmission.

The bridge would have regional trade benefits as well, reducing the distance

required to travel between Dhaka and Kolkata.

Construction of the bridge could also raise the profile of the south- west‘s Mongla

port, which operates at a fraction of its potential capacity. This could benefit the

country‘s northwest and provide an alternative port for Dhaka.

10

Funding for the Bridge:

On 3rd

December 2010, the Communications minister Syed Abul Hossain disclosed the

funding regarding the Padma Bridge. He said that, the funds for the much-desired Padma

Bridge have been arranged and its construction will be completed before the end of the

tenure (25th

October 2013) of the current government4.

The total cost of the project is estimated to be USD 2.915 billion. USD 1.2 billion of this

amount was to come from the World Bank (WB), USD 1.155 billion from other lending

agencies (Asian Development Bank, Islamic Development Bank, and Japan International

Cooperation Agency), and USDD 560 million from the Bangladesh government. The

World Bank‘s share would come from its International Development Association (IDA),

which provides ―credits‖ rather than ―loans‖ at no interest with only a .75% service

charge. The Bangladesh government would not have to begin payment for 10 years, and

it would have 40 years to pay off the loan. In short, the terms were highly favorable.

World Bank ceased funding alleging corruption in high-ups:

However unluckily today, after three months of deceased term of then 14 party

government, there lays cloud of vagueness over the completion of Padma bridge project.

With corruption and mismanagement, initiated by then communication minister and

backed by the government, donors have refused to risk the funding on such a large-scale

4 http://www.independent-bangladesh.com/2010120312125/country/funds-for-padma-bridge-arranged.html

11

project. Specially with heretofore adverse image of Bangladesh in Corruption Perception

Index of Transparency International Bangladesh (16th

highest corrupt in 2013). Refused

with funds from outside, government had decided to construct the bridge through internal

find rising that will be completed within fiscal year 2015-16.5 Most of it will be covered

by cutting off funds from ADP (Annual Development Program) that will definitely

hamper the execution of other essential projects.

It all commenced when on June 29 in 2012, the WB ceased its funding for the bridge.

After the World Bank raised graft allegations in September 2011, all work of the bridge

project stopped, and in June next year, the WB cancelled its $1.2 billion financing for

the project saying it had proof of a ―corruption conspiracy‖ involving Bangladeshi

officials, executives of a Canadian firm and some individuals. The World Bank had

credible evidence corroborated by a variety of sources which points to a high-level

corruption conspiracy among Bangladeshi government officials, SNC Lavalin executives,

and private individuals in connection with the Padma Multipurpose Bridge Project.

In their statement they said; ―Because we recognize the importance of the bridge for the

development of Bangladesh and the Region, we nonetheless proposed to proceed with an

alternative, turnkey-style implementation approach to the project provided the

Government took serious actions against the high level corruption we had unearthed‖.

The World Bank provided evidence from two investigations to the Prime Minister, as

well as the Minister of Finance and the Chairman of the Anti -Corruption Commission of

5 http://archive.thedailystar.net/newDesign/news-details.php?nid=241334

12

Bangladesh (ACC) in September 2011 and April 2012. They urged the authorities of

Bangladesh to investigate this matter fully and, where justified, prosecute those

responsible for corruption.

Although GOB reshuffled its cabinet, it didn‘t take action concerning the corruption

conspiracy. The government only took notice when World Bank cancelled the loan

agreement in June 2012. Then in September 2012, the WB revived the loan on four

conditions. To be willing to go forward with the alternative turnkey-style approach, The

World Bank sought the following actions:

1. Place all public officials suspected of corruption on leave.

2. Appoint a special investigations team within the ACC to investigate the

allegations.

3. Agree to provide a WB panel with full access to the investigation.

4. Provide financiers greater oversight of the project procurement process.

The Bangladesh government did order the necessary investigations and consented to

greater oversight, but it did not suspend the alleged officials nor agree to provide the WB

panel with access to the ACC investigation. After months of negotiations, unable to reach

agreement on two of the four measures during a last mission to find a way forward, the

World Bank was left with no option other than to cancel our support for the Bridge on

June 29, 2012. It stated:

“The World Bank cannot, should not, and will not turn a blind eye to evidence

13

of corruption. We have both an ethical obligation and a fiduciary

responsibility to our shareholders and IDA donor countries. It is our

responsibility to make sure IDA resources are used for their intended purposes

and that we only finance a project when we have adequate assurances that we

can do so in a clean and transparent way. In light of the inadequate response

by the Government of Bangladesh, the World Bank has decided to cancel its

$1.2 billion IDA credit in support of the Padma Multipurpose Bridge project,

effective immediately.” (The World Bank, 2012)6

The official response from government:

The Bangladesh government‘s consistent position has been that there were no corruption

in the project at all and asked the WB should provide proof of corruption if it has it. On

several occasions the Prime Minister has stated that there simply could be no corruption

because the WB had not yet provided any funds. The notion that corruption could not

occur before the WB disbursed funds is simply inconsistent with the allegations that have

been leveled. The governmental response has been frustrating to many, and citizens have

been left with insufficient information to evaluate the veracity of either side‘s statements.

The WB submitted two reports alleging corruption to the government of Bangladesh, but

the World Bank has no jurisdiction to conduct criminal investigations and its governing

legislation does not permit it to make the reports public. The government, for its part, has

refused to release the reports although it has the discretion to do so.

6 http://www.worldbank.org/en/news/press-release/2012/06/29/world-bank-statement-padma-bridge

14

Talking to journalists at his secretariat office, Finance Minister AMA Muhith said no

corruption had taken place in the Padma bridge project. ―It is a case of corruption

conspiracy.‖ Only the BNP believed that corruption took place in the bridge project, said

the finance minister. Asked whether he was absolutely sure that there was no corruption

in the project, Muhith confidently said no graft took place in the project. ―The

conspiracy of corruption is not corruption,‖ he said.7

Involvement of Syed Abul Hossain:

Over the pressure of WB, the ACC submitted initial report while omitting the name of

Communication Minister Ayed Abul Hossain. ACC sued seven8 people on Padma Bridge

corruption allegation case on December 17, 2012 at Banani Police Station. Syed Abul

Hossain and former state minister for foreign affairs Abul Hasan Chowdhury were not

formally charged. However, the Commission said their involvement will be more

thoroughly investigated. On January 9 , ACC was given proof of Abul Hossain‘s

involvement. But in a letter written to World Bank on January 21, the commission said

there still was not enough evidence to formally charge Abul Hossain.9 The World Bank‘s

external panel, which visited the ACC for the second time (their first visit to Dhaka was

in October 2012) from December 2 to 5 in 2012, left Dhaka unhappy over the omission

of Syed Abul Hossain‘s name as a top corruption suspect in the project.

7 http://archive.thedailystar.net/beta2/news/no-big-name-except-abul/

8 The seven include former Bridges Division secretary Mosharraf Hossain Bhuiyan and Lavalin officials Ramesh, Mohammad Ismail and Kevin Wales. The rest are Kazi Mohammad Ferdous, ex-secretary of tender evaluation committee for the bridge construction; Executive Engineer of Roads and Highway Department Reaz Ahmed Zaber and Lavalin’s local agent Mohammad Mostofa. (The Bangladesh Chronicle, December 9, 2012)

9 http://www.clickittefaq.com/more-stories/padma-bridge-corruption-abul-hossains-commission-4-percent/

15

In its final report10

in 2013, the World Bank‘s external panel has mentioned only the

name of ex-communications minister Syed Abul Hossain as a high-profile corruption

suspect in the Padma bridge project. The panel expressed dissatisfaction at Abul‘s

exclusion from the First Information Report filed by the Anti-Corruption Commission,

and said the ACC was not probing the Padma bridge corruption allegations in a free and

fair manner.

According to World Bank allegations, former communications minister Abul

Hossain was supposed to receive 4 percent of the fees as bribe for awarding the

supervision job of the Padma bridge project to the desired firm11

. Anti-Corruption

Commission (ACC) did not name him as a suspect even though his name was mentioned

in the list of bribes in Ramesh Saha‘s diary (Lavalin official).

A high ACC official who opposed Abul Hossain‘s inclusion told The Daily Star that it

was true Ramesh mentioned 4 percent against the ex-minister‘s name. But the Lavalin

official did not put any date and this indicates the bribe was not given yet.12

Ramesh

might have decided to offer the bribe to Abul. But the ex-minister might not have been

aware of it and in that sense the ACC cannot blame him, the official added.

More recent attention has been on the Prime Minister‘s Economic Advisor Moshiur

Rahman, who was also named in the investigation. Even if he was not directly involved

10 http://archive.thedailystar.net/beta2/news/padma-bridge-possible-with-govt-fund/

11 http://www.clickittefaq.com/more-stories/padma-bridge-corruption-abul-hossains-commission-4-percent/

12 http://www.bangladeshchronicle.net/index.php/2012/12/4pc-was-for-abul/

16

in corruption, Moshiur Rahman had been designated as the Integrity Advisor for the

project. This position was in many ways central to the project‘s anti-corruption strategy

and the means by which the Prime Minister was to take direct responsibility for ensuring

the project was free of corruption.

SNC -Lavalin’s involvement in corruption:

In September 2011, Canada‘s national police force‘s anti corruption division raided

Canadian based SNC-Lavalin‘s offices in September 2011. In April 2012 two SNC-

Lavalin executives were charged under Canada‘s Corruption of Foreign Public Officials

Act for allegedly attempting to bribe Bangladeshi officials in their bid for the consultancy

contract for the Padma Bridge. Three employees of SNC-Lavalin have already been

charged under Canada‘s foreign bribery act, including a former senior executive, Kevin

Wallace. Two other former SNC Ramesh Shah and Mohammed Ismail have also been

charged.

In Canada, where SNC Lavalin‗s headquarters are located, after executing numerous

search warrants and a year-long investigation based on a referral from the World Bank,

the Crown Prosecution Services brought corruption charges against two former SNC

executives in connection with the Padma Bridge Project. The World Bank on Apr 17 last

year banned the SNC-Lavalin Inc for 10 years because of its ―misconduct‖ in relation to

the Padma bridge project. Over a 100 affiliates of the company had also been

blacklisted in what was said to be the ‗longest debarment period‘ ever agreed to in a

World Bank settlement.

17

Bangladesh is one of the numerous countries where SNC is facing allegations of bribery.

The company‘s former chief executive, Pierre Duhaime, has been accused of multiple

fraud and corruption-related crimes by Quebec‘s anti-corruption task force in connection

with payments that SNC allegedly made to secure the $1.3-billion contract for a new

Montreal hospital.

Riadh Ben Aissa, a former executive vice-president in charge of SNC‘s international

construction, also faces charges in connection with the hospital payments. He is currently

detained in Switzerland, where authorities are probing how he used that country‘s

secretive banking system to funnel an estimated $160-million to Saadi Gadhafi, the son

of the late Libyan dictator.

Despite its strong anti-World Bank rhetoric, faced with undesirable alternatives, the

Bangladesh government seems to have recognized that it needs the WB to complete the

project. Backtracking, the government has sought to address the remaining concerns of

the Bank in hopes that the project will move forward. Syed Abul Hossain formally

resigned from the cabinet in July, and, after further WB pressure, his resignation was

officially accepted in late August. Additional officials, such as Bridges Secretary

Mosharraf Hossain, were also sent on leave.

The World Bank was in discussion with the Government for nearly a year, seeking a

serious commitment to address evidence of corruption under the project. Unfortunately,

the Government took no such action for nearly nine months, leading many to call for the

18

early cancellation of the loan. Given the tremendous economic and social benefits of the

bridge for the people of Bangladesh, the World Bank was not willing to let it go without a

struggle to save the project.

But, the World Bank has a few precedents in its history of reinstating a cancelled loan in

other countries. Conversely, there is little scope to revisit the decision in the current

circumstances, as the Government is unable to agree to two measures deemed important

in the conduct of a full and fair investigation into evidence of corruption.

19

Incidence Two: Hallmark stings and obsession of government:

The Hallmark Group, owned by Tanvir Mahmud,

came to the spotlight when an investigation by the

Bangladesh Bank found the Ruposhi Bangla Hotel

branch of Sonali Bank responsible for illegally

disbursing loans to the Hallmark Group and five other

companies between 2010 and May 2012. The

commission investigators said that the Hallmark

Group in liaison with bank officials opened 2.3 LCs a minute, as usually it needs

minimum 1.3 to 2 hours for creating a new LC. The kingpin of the country‘s biggest

banking scam, Hallmark Group, has embezzled around Tk 1,492 crore from Ruposhi

Bangla Hotel branch of Sonali Bank by creating 804 letters of credit (LC) in a single day,

according to Anti-Corruption Commission probe findings.13

Nepotism or favoritism of any responsible authority is considered corruption. The stuffs

of Sonali Bank with association of one of influential bureaucrats from government held

the capital market into a huge liquidity crisis through this scam. The amount embezzled

by the six entities is equivalent to almost 15 percent of the total estimated cost of the $2.9

billion Padma bridge project.14

Beginning of the story:

13 http://progressbangladesh.com/hallmark-scam-tk-1492-crore-embezzled-in-a-day/

14 http://www.amarbdnews.com/english/court-orders-hall-marks-250-accounts-frozen/

20

In May 2012, a report from the Bangladesh Bank revealed that the Ruposhi Bangla Hotel

Branch of the state-owned Sonali Bank, Bangladesh‘s largest commercial bank, illegally

distributed Tk 36.48 billion (US$460 million) in loans between 2010 and 201215

. The

largest share, of Tk 26.86 billion (US$340 million), went to the now infamous Hallmark

Group. While the focus has understandably been on Hallmark, other companies also

participated in the fraud, including:

T and Brothers, Tk 6.10 billlion

DN Sports, Tk 330 million

Paragon Group, Tk 1.47 billion

Khanjahan Ali, Tk 50 million

Nakshi Knit, Tk 660 million

This is considered to be the country‘s largest banking scandal. It surpassed previous fraud

cases, such as a Tk 6.2 billion Letter of Credit fraud in Chittagong in 2007, a Tk 5.96

billion fraudulent withdrawal from Oriental Bank in 2006, and a Tk 3 billion forgery

scandal in 2002.

It is alleged that the scandal resulted from complicity between officials of Hallmark and

Sonali Bank, in particular between Tanvir Mahmud, Managing Director of Hallmark

Group, and Azuzur Rahman, Manager of Sonali Bank‘s Ruposhi Bangla branch. The

15 http://www.ulab.edu.bd/CES/documents/Hallmark_Sonali_Jan_13(sm).pdf

21

alleged scam exploited the Letter of Credit (LC) system of financing trade.16

Hallmark is accused of establishing fictitious companies, such as Anwara Spinning Mills,

Max Spinning Mills, Star Spinning Mills, which were shown as recipients of the LCs.

These companies submitted contrived paperwork reporting deliveries of fabric to

Hallmark, which were then paid for by the LCs from Sonali Bank‘s Ruposhi Bangla

branch. Because the fictitious companies and Hallmark had their accounts at the Ruposhi

Bangla branch, on paper it looked like the branch‘s assets and liabilities were balanced

out.

Involvement of Bank stuffs:

Most experts and analysts have established that for a fraud of this scale to occur, the

bank‘s top management must have been involved in conspiracy.17

Early media reports

based on the account of a Sonali Bank whistleblower alleged Sonali Bank‘s Deputy

Managing Director made extensive efforts to block audits of the Ruposhi Bangla branch,

and eventually transferred the persistent auditors to a branch outside Dhaka.18

A probe by a parliamentary committee noted that the Ruposhi Bangla branch was

certified as a ―low-risk‖ branch by the inspection and audit team of the bank despite

violations of financial rules between 2007 and 2011.19

In fact, an audit wing report went

16 Md. Fazlur Rahman and Tamanna Khan. 2012. “A Question of Public Trust.” The Star. Vol. 11(37): Sept. 21.

17 Fahmida Khatun. 2012. “State of Governance in the Banking Sector: Dealing with Recent Shocks.” Center for Policy Dialogue: Nov. 5. 18 Inam Ahmed and Arun Devnath. 2012. “The enemy within.” The Daily Star: Sept. 4.

19 Daily Sun. 2012. “SB board blamed for Hallmark Scam.” Daily Sun: Dec. 17.

22

further this as to stress that the accused manager of the branch was managing the branch

efficiently with his extraordinary talent and sufficient banking knowledge.

Members of the bank‘s board of directors claim to have had no knowledge of the

malfeasance. External bankers and experts have also regarded this claim with some

skepticism20

.

The board had formed an Audit Committee and an Asset Liability

Management Committee specifically for these reasons. Yet, the board failed to notice

several loopholes, including:

The loans to Hallmark exceeded by a large margin the cap that

limits how much Sonali Bank can lend to any single client21

.

Hallmark lacked the collateral to justify such large loans.

The Ruposhi Bangla branch exceeded its loan quota by almost

500%22

.

Role of Finance Ministry:

State-owned banks are additionally overseen by the Ministry of Finance, which appoints

the banks‘ board of directors and bank leadership. Not only did the ministry fail to

provide proper oversight, it rejected calls from Bangladesh Bank to reconstitute Sonali

Bank‘s board following the detection of irregularities. Furthermore, the Finance Minister

initially attempted to dismiss the scandal as an inconsequential amount of money, a

20 Rahman and Khan, “A Question of Public Trust”; Md. Noor Solaiman Jewel. 2013. “Sonali Bank vs Hall Mark Group: An Analysis.” Financial Express: Jan. 6.

21 Nasiruddin Ahmed. 2013. “Hallmark-Sonali Bank Loan Scam” Financial Express: January 14.

22 Daily Sun. “SB board blamed for Hallmark Scam

23

statement that he later retracted following considerable public criticism.

Reaction from Finance minister:

The gaffe-prone Finance Minister not just termed it as the best bank, but also tried to

justify the scandals that emptied the bank that once enjoyed huge excess liquidity.

Defending Sonali Bank‘s numerous scandals that could be dug out from any branch of

the bank, Finance Minister AMA Muhit said that there is fraudulency at every bank in the

world. As if fraudulence and forgery are something that as usual, most common and

justifiable too.

Abul Maal Abdul Muhith had offered apology in Parliament amid heavy criticism over

his remarks; ―everywhere in the world embezzlement and theft take place in the banking

sector,‖ he said, replying to a reporter‘s query after a meeting with Sonali Bank‘s Board

of Directors at the Secretariat.23 Bangladeshi finance minister has violently reacted at

media‘s role in exposing this huge financial scam. Expressing anger, the finance minister

said, “”… banking crisis, which is not a crisis at all. It is a matter of TK. 3000 crore [30

billion] or 4000 crore [40 billion]. Nonsense! But you (media) are harming the banking

sector by publicizing it.”24

Later he drew fire from ruling MPs and had apologetically said in Parliament, “There has

been a misunderstanding over my statement. My statement may encourage corruption. I

did not mean to encourage the scammers by any means. So, I regret having made the

23 http://bdnews24.com/economy/2013/11/06/muhith-defends-hall-mark-scam-again

24 http://www.banglanews.com/2012/10/13/how-to-rob-a-a-government-controlled-bank-a-hallmark-group-story/

24

speech and am withdrawing it," he said. 25

Criticising the 79-year-old Finance Minister, ruling Awami League MP Sheikh Fazlul

Karim Selim had said, "I realise that he has become old. I request that he does not make

such statements. The less he speaks the better."26

Involvement of the Prime minister’s adviser:

It may be mentioned here that, Prime Minister‘s advisor Syed Modasser Ali has been

accused of collaborating with Hall Mark Group in siphoning such large sum of money

from the state owned bank. A front-ranking Daily published report stating the advisor

bought a piece of land at Dhaka‘s Uttara residential area with the money he received

from Hall Mark Group.27

The Anti-Corruption Commission (ACC) has information that Syed Modasser Ali

allegedly influenced Sonali Bank authorities into granting a huge amount of loan to the

controversial Hallmark Group illegally, said ACC sources.28

During the daylong grilling,

a few of the Sonali Bank officials told the investigators that they had seen Modasser Ali

visiting the Ruposhi Bangla Hotel branch of the bank frequently, said the sources. The

bank officials said they thought the adviser might have played a role in influencing the

bank authorities into granting loans to Hallmark and five other business organizations as

25 http://bdnews24.com/economy/2013/11/06/muhith-defends-hall-mark-scam-again

26 Ibid.

27 http://www.banglanews.com/2012/10/13/how-to-rob-a-a-government-controlled-bank-a-hallmark-group-story/

28 http://archive.thedailystar.net/newDesign/news-details.php?nid=247643

25

he used to enquire about the development of the loan process.

Contacted later, Modasser Ali, health and social welfare adviser to PM, denied the

allegation. He said, ―I go there (Ruposhi Bangla Hotel branch of Sonali Bank) as my

pension account is with this branch.‖He also said one of his relatives worked there and

the branch manager was from his home district Gopalganj. ―I happen to know the owner

of Hallmark Group and attended some programs of the organization but I had no idea

about the loan,‖ he added.29

Usually the law in every land states; ―innocent until proven

guilty‖. It is very difficult to prove guilty of person(s) who themselves create or change

the law (ruling party).

Stuffs suspended and Charge sheet filed:

Bangladesh Bank on August 26 directed Sonali Bank to suspend 31 of its officials,

including two deputy-managing directors, on charges of their involvement in the

anomalies. Sonali Bank Ltd later suspended 17 of its officials. The officials have been

held responsible for scandalous distribution of loans to the textile company Hallmark

Group and some other firms, according to an investigation by the central bank. The state-

owned bank has also written to the finance ministry to take action against three top

officials.

The suspended officials are senior officers of Ruposhi Bangla Hotel branch Ujjal Kishore

Dhar, Tushar Kanti Dhar, Jasmine Nahar, Mihir Chandra Mazumder, junior officer

Wakiluddin Ahmed and officer Saidur Rahman, deputy general manager of international

29 ibid.

26

trade department Sheikh Altaf Hossain, assistant general managers Shafiz Uddin Ahmed

and Ijaz Ahmed, senior executive officer Mukhlesur Rahman, executive officer Sohrab

Hossain, assistant general managers of the general manager's office Golam Nabi Malik

and Ashraf Ali Patwari, senior executive officer Wahed Uddin Ahmed and deputy

general manager of inspection and audit department Nessar Ahmed Chowdhury,

executive officer Ekramul Mandal and branch inspector Kamrul Hossain Khan.30

On October 4 in 2012, Anti-Corruption Commission (ACC) filed 11 cases against 27

people including Azizur Rahman, the ex-manager of the alleged bank branch31

. On

October 7, RAB arrested Hallmark‘s Managing Director Tanvir Mahmud. Subsequently

the firm‘s General Manager Tusher Ahmed, Azizur Rahman of Sonali Bank and

Mahmud‘s wife and group Chairperson Jesmine Islam were connected with the scam32

.

During interrogation, Mahmud has made a confessional statement and given names of

people who assisted him in the scam. He also stated that Azizur Rahman was his key

partner in crime. As of late, they are in custody of ACC and RAB for interrogation and

the case is still under investigation.

According to the news report, Tanvir Mahmud told journalists that he had assets worth 20

times higher than the amount borrowed from the state-run commercial bank. Perhaps it is

from that perspective columnist Rubana Huq wrote, ―Ten years from today, Tanvir

Mahmud will walk free and become a hero. Hallmarks have happened in our history for

the last 30 years and Hallmarks will continue.‖ All it would take to get him back on track

30 http://archive.thedailystar.net/newDesign/news-details.php?nid=247834

31 http://unbconnect.com/acc-grilling/

32 http://www.dhakacourier.com.bd/?p=8576

27

is a few hundred crores of illegal money to a few corrupt politicians, banks, and other

high officials and a few charity and cultural events‖.33

Later, the primary investigation has been led by the Anti-Corruption Commission, which

filed another 26 cases against 35 officials (including some of the same individuals) in

December 2012.14

ACC deputy director, also probe officer Meer Joynul Abedin Shibli,

filed the charge sheet with Ramna Thana.34

A Dhaka court ordered authorities to freeze

250 accounts of much talked Hall-Mark group.35

Recovery of money:

One major concern is recovery of the lost money, which, to put the amount in

perspective, is equivalent to 17% of the government‘s education budget. According to the

findings of a parliamentary committee probe, of the Tk 26.86 billion loaned to Hallmark,

only about Tk 4 billion was actually invested and the remaining amount could not be

traced. (This is the case despite early claims by Tanvir Mahmud that he had assets to

cover the amount borrowed twenty times over.) Pradip Kumar Dutta, CEO and MD of the

Sonali Bank said that they have already realized Tk 1,170 crore loan amount from

fraudulent Hall-Mark Group. But he fears that it could be impossible to collect the

remaining Tk 2,500 crore.36

Impact on the banking sector:

33 ibid.

34 http://www.newagebd.com/detail.php?date=2013-10-07&nid=68360

35 http://www.amarbdnews.com/english/court-orders-hall-marks-250-accounts-frozen/

36 http://primenews.com.bd/details/18427

28

This incident has clearly undermined the public‘s trust in banks and trust between banks.

Non-performing loans in the banking system as of September 2012 were already at a high

8.75% of total outstanding loans, and interest rates were up to 19%37

. Government

borrowing had already created a liquidity crisis, with state-owned commercial banks only

distributing 37% of their targets to small and medium sized enterprises38

.

Immediately after the scam was unearthed in 2012, the bank faced liquidity crisis that

forced it to pay penalty of about Tk 800 million to the Bangladesh Bank every day as it

could not maintain deposit of cash reserve ratio (CRR) with the Bangladesh Bank even

after borrowing Tk 40-50 billion each day.

Due to mounting classified loans of Tk 4,000 crore and slow credit flow, Sonali Bank's

profit fell down to Tk 3.81 billion and income to Tk 600 million as on June 30,

2013.39

Capital deficit of the bank increased to Tk 5,200 crore during same time of last

year while provision shortfall increased to Tk 576 crore. The number of losing branches

of the bank dropped to 53 from 60 during the period.

The cost of public corruption took its toll again. Over 200 workers of the scandal-

hit Hallmark Group were injured during a clash with police in Hemayetpur, Savar on

October 23 in 2012. Local sources said a large number of workers of different units of the

Hallmark Group started demonstrating in front of the Group‘s office in the morning

demanding immediate payment of their arrear wages for the last month and bonus for

37 Syful Islam. 2012. Small businesses pay price in Bangladesh’s biggest loan scam.” Trust Law: Oct. 2.

38 Ibid.

39 http://primenews.com.bd/details/18427

29

Eid-ul-Azha.40

Usually, banks collect money from depositors and provide loan to business entities and

other borrowers. After this huge Sonali Bank scam common people might lose their trust

in the banks. They will not find it secure to keep their money in the banks. Many of them

may even be tempted to withdraw their deposits in fear of a collapse of the banking sector

like the share market collapse. If common people shy away from the banks this may

cause shortfall of money in our banking sector as well as other financial sectors like

investment, trade and commerce. If people withdraw money from banks then

entrepreneurs would not get money from banks to invest in productive sectors. Since

banks are very important institutions in financial intermediation in economic activities,

the lack of trust in banks has a pervasive effect on the whole economy.

40 http://www.dhakacourier.com.bd/?p=8576

30

Incidence Three: Share market scandal

Stock market is one of the most

important financial institutions of any

economy as well as Bangladesh. It

opens door for companies to raise huge

amount of capital from a lot of

individual investors inside & outside of

a country.

It is said that stock market is an intermediary institution to adjust a gap between surplus

units and deficit units of an economy. In last decade or so, for millions of middle class

educated people in Bangladesh investing in stocks is more popular than investing in any

other investment sectors. For an investor, stocks are more liquid than any other

investment sources as it gives ability to sell and buy ownership anytime without any

hassle.

But unfortunately, Some 3.3 million small investors were robbed of their last penny

through book building, split, priority share, placement and direct listing. Money has been

laundered in dollars. Similar kind of crash occurred during the first tenure of Awami

League government in 1996. But this time, the number of victims mounted so high that

instigated trouble not only to individual investors but also to the smoothness of the

economy. Irregularity at monitoring and favoritism to selected individuals with different

monetary policies dispelled dreams of millions of investors. Many were forced to wake

31

up at the middle of their dream and many were forced to quit dreaming at all at the cost

of satisfying high ambition of chosen few companies and individuals who not only took

away investment, but also replaced it with nightmare to small investors. Investigation

committee was set up and it came with 60 big names of corrupted individuals and

companies. Resembling 1996, it was also the same government who kept those big names

untouched and let the market crushed with millions of dreams barred.

Why so many investors?

Since 2007, share prices of Bangladesh stock market have been increasing steadily over

the past four years and it outperformed almost all the world s markets. For instance, it

performed as 2nd

best (see figure 1) in the world after Sri Lanka in 2010 gaining nearly

83%. The financial year 2008-09 is known for the global financial and economic crisis.

Many developed and developing countries fall into recession. However, it could not

affect Bangladesh economy greatly. So, the stock market of the country did not see any

significant changes or fall. As CPD (2011) reported, financial year 2008-09 was a volatile

year but during this year Bangladesh economy benefited from low prices of importable

and was able to avoid negative pressure on its export of goods and services.

32

Figure 141

– 2010 country Stock market performance.

The consecutive outstanding performance of Bangladesh stock market in recent years

before the crash lured millions of investors to the stock market to invest their little

savings. Before the stock market crash the market had become a route of easy money for

too many new individual investors. That is why millions of fresh investors invest their

small saving in the market during this period. For these fresh investors investing in this

market provided a way to avoid working a job. Even some BO account holders worked as

intermediaries of friends, relatives to invest their money in the stock market

Finally, the stock market crashed and taught these investors that investing money in the

stock market involves risk too. But the lesson that investors are taught wreaked havoc on

the lives of millions of innocent investors. The crash wiped out billions of taka from the

market where fresh, illiterate investors were the main victims.

History of stock market crash:

It may negatively seem coincidence that whenever the Awami League came to rule, stock

41 Source: www.bespokeinvest.com

33

market collapsed. It happened in 199642

and repeated again in 2010-11. The scenario of

stock market crash in 1996 and crash in 2010-11 are totally different. The number of BO

account holders was only 300,000 and most of them were very new in the market. During

the crash of 1996 paper shares used to be sold in front of DSE and it was not easy for

investors to identify fake and original shares. The market was enough developed to gain

confidence of investors. There was no automated trading sys- tem, surveillance was not

enough strong and no circuit breakers as well as international protections.43

From 1991 to the end of 1995 DGEN price index gained by 139.3% and reached to 834

point. But in 1996 the market experienced dramatic change and pushed the price index up

by 337%. DGEN Index recorded high growth from July and stood at 3648.7 points or by

280.5% on 5th

November 1996. Besides, Chittagong Stock Exchange experienced the

same change and grew by 258%. Chittagong stock exchange index increased from 409 to

1157 points in 1996 within one-year time.

During the ‗Bull Run‘ period new records were posted almost every day in both bourses

for example market capitalization achieved to $2 billion which is equal to 20% of total

GDP. As market became overheated government took step by selling state owned

institutions and Taka 2 billion will be given to ICB for buying shares and support the

market. But the steps taken by the government did not work. (Hossain, 2011)44

Finally abnormal rise of share prices started to fall and Bangladesh stock market

42http://www.economist.com/blogs/banyan/2011/01/stockmarket_riots_bangladesh

43 Hossain M. K., 2011. SECURITIES AND EXCHANGE COMMISSION ANNUAL REPORT 2010-11.

44 Hossain M T., 2011. Stock market crashes of 1996 and 2011. [Internet], Available from: <http://www.hawker.com.bd/news_details.php?news_id=143942&news_category_id=1 4&val_lan=>

34

experienced its first crash of the history in 1996. The index lost over 233 points on Nov

6, 1996. After the bubble burst DGEN index dropped to its lowest point and stood at 957

in April 1997. It stood at around the same point where it was 10 months before and DSE

General Price index lost almost 70 percent from its highest point of November 1996.

Then index continued to decrease for next 7 years until April 2004. During this long time

period DGEN Index seldom crossed 1000 point of the index45

.

Figure 246

: DSE general index (DGEN) Graph

Finally on 26th December 1996 SEC formed a probe committee to investigate and find

out manipulators behind the stock market debacle. The committee published a report on

March 27, 1997 stating a number of companies, investors and brokers who were in the

45 http://www.thedailystar.net/forum/2010/april/bull.htm

46 Dhaka Stock Exchange

35

market manipulation. SEC obtained warrants of arrest against 32 people in 7 brokerage

firms, 8 listed companies and filed 15 share-scam cases in the court47

. It took too long for

the government and market regulators to restore the market conditions. The stock market

crash of 1996 destroyed confidence of investors.

STOCK MARKET CRASH OF BANGLADESH IN 2010-11

The 2010-11 Bangladesh share market scam48

is an ongoing stock market turmoil in

the two Bangladeshi stock exchanges, DSE (Dhaka Stock Exchange) and

CSE(Chittagong Stock Exchange). Millions of small investors have lost all their

investments due to the stock market crash49

.

According to CPD (2011)50

, the total number of BO Account holders on 20th December

2010 reached to 3.21 million though the number was 1.25 million in December 2009.

Most of these new investors don‘t have enough knowledge about the stock market but

invest their most or all savings in the market. 238 brokerage houses opened 590 branches

at 32 districts. As CPD (2011) found, internet-based trading operation, opening branches

of brokerage houses across the country, easy access to the market information, arranging

a countrywide 'share mela (fair)' are the factors for increasing investors. But supplies of

new securities through IPOs were not enough to chase huge capital of too many investors

47 http://www.thedailystar.net/law/2006/10/01/fmr.htm

48 http://en.wikipedia.org/wiki/2011_Bangladesh_share_market_scam

49 Chowdhury, Syed Tashfin (12 October 2011). "Bangladesh starts market rescue fund". Asia Times Online.

50http://www.cpd.org.bd/downloads/IRBD%20FY11_First%20Reading.pdf

36

in the market.

The stock market was in turbulence throughout much of 2009, with the long bullish trend

starting to turn grim. The bullish trend was initiated by the end of the two-year political

crisis and re-emergence of democracy when Awami League won the December 2008

polls. The market was heavily aided by the entrance of Grameenphone into the capital

market, when the index rose by 22% over a single day on 16 November 200951

. Share

prices continued to fluctuate, reaching the annual high in mid-2009 before plummeting

by the end of 2009, with retail investors threatening a hunger strike52

.

Root of BUBBLE:

To grow Bangladesh`s economy by 7-8% per year Bangladesh Bank adopted

accommodative monetary policy during the high inflation periods to support investment.

Bangladesh Bank has pegged Taka against dollar to support exports. As Taka has been

undervalued it has made excess growth in money supply. Last couple of years broad

money made excess liquidity and the main motive behind it was Bangladesh Bank`s

exchange rate policy. A big portion of this excess liquidity had gone to the stock market

but there were very few shares in the market. The policy that was adopted by Bangladesh

Bank to grow economy by increased exports & investment eventually misguided and

ended up blowing the mother of all bubbles. Then government again fuelled the bubble

after permitting whitening of black money through tax breaks and schemes53

. Timeline of

51 Sarwar A Chowdhury; Gazi Towhid Ahmed (16 October 2011). "A struggle to fix flaws in index". The Daily Star.

52 "Retail investors go on hunger strike tomorrow". The Daily Star. 28 December 2009.

53 http://dpwriters.wordpress.com/2011/02/04/share-market-bubble-the-big-picture/

37

historical fall of the crash has been divided into two sections which are December 2010

and January 2011.

It has been stated that 5th

December 2010 as the last glorious day of the year for the

investors of Bangladesh stock market54

. On this day DSE General Index (DGEN) gained

its all-time highest 8, 918.51 point & broke all old records of DSE turnover by Taka

32.50 billion. On the other hand, 19th

December was a historical day of the financial year

2010-11 in Bangladesh stock market. On this day DSE witnessed its biggest one-day fall

in 55 years history until the date with losing 551.76 points or 6.71 percent. The losing

index was even higher than 284.78 points or 3.32 percent of 12th

December. Prices started

to nosedive in an hour after the trading started and about 200 points were wiped off. In

the middle of the session it recovered little bit and ended up the session at 7654 point.

Investors took to the streets with protests. Random objects like wood and papers were set

on fire in front of the DSE office in Motijheel55

. They chanted slogans against the top

bosses of the premier bourse and market regulators, and demanded resignation of the

central bank governor.

54 http://www.e-dirts.com/2010/small-investors%E2%80%99-anger-may-turn-into- big-issue/

55 http://archive.thedailystar.net/newDesign/news-details.php?nid=166662

38

33

Figure 2: DSE daily DGEN index of December, 2010

Figure 3: CSE daily CASPI index of December, 2010

7500,00

7700,00

7900,00

8100,00

8300,00

8500,00

8700,00

8900,00

DGEN

21000

21500

22000

22500

23000

23500

24000

24500

25000

25500

CASPI

Figure 3: DSE daily DGEN index of December 2010

Share prices again started to fall from 3rd

January 2011 as investor had the information of

ongoing liquidity crisis of financial & non-financial institutions that limiting margin loan.

The down slope of index is noticeable from January 2nd to 10th

. As Chairman of probe

committee Mr. Ibrahim Khaled (2011)56

mentioned, ―Due to trigger sale of shares from

2nd

to 5

th January, market experienced its biggest decline in share prices and market

crash from 6th

to 10th

January.

On 9th

January DSE General (DGEN) Index declined by 600 points and all indices

declined nearly 7.75 percent. On 10th

January Dhaka Stock Exchange General (DGEN)

Index lost by 660 points or 9 percent & Chittagong Stock Exchange Selective (CSE)

Index declined by 914 points or 6.8 percent within 50 minutes of trading. CSE All Share

Price Index (CASPI) stood at 19212.34 losing by 1,396.21point, which is 6.77 percent.

56 Khaled K. I., 2011. Investigation report of Probe Committee.

39

CSE Selective Categories Index (CSCX) lost 914 points or 6.87 percent and CSE -30

Index also lost 1490.83 or 8.28 percent.

35

Figure 5: CSE daily CASPI index of January, 2011

It had broken all previous records of decreasing index. After that Security & Exchange

Commissions called for an emergency meeting with BB and stop trading at both Dhaka

& Chittagong Stock Exchanges. Investors came out in the street with processions and

demonstrated against free fall of Share index in both bourses as well as suspension of

trading. Investors from different parts of the country such as, Chittagong, Comilla,

Narsingdi, Narayanganj and Jessore brought out processions and clashed with law en-

forces in some places as well.

Following two days consecutive historical fall of share prices the government, Central

Bank & SEC took instant actions to stabilize the market and bring the confidence

among million of small investors. The government created pressure on Bangladesh

Bank & SEC to improve the market condition. As a result, recovery was initiated with

Institutional buyer for instance merchant banks, state owned banks & non-financial in-

stitutions. On 11th

January market recovered 15.6 percent of General index by the end of

the session and made a record in Bangladesh stock market history of gain. (Chowdhury,

2011)

18000,00

19000,00

20000,00

21000,00

22000,00

23000,00

24000,00

CASPI

CASPI

Figure 4: CSE daily CASPI index of January 2011

Within December 2010 and January 2011, the DGEN index fell from 8,500 by 1,800

points, a total 21% fall, with masterminds of the crash making about BDT 50 billion ($

667 million) out of the scam.

The market fell by 5% on 12 June, before taking a 4% plunge on 11 October, sending the

market into further turmoil. The fall finally triggered small investors to go on a fast-unto-

death on 16 October after forming the Bangladesh Capital Market Investors' Council.

Opposition politicians declared their solidarity with the protesters. The market stood at

around 5,500 index points in October 2011 from 8,900 only a year ago. Protests

40

continued throughout the

successive months.

Probe committee:

A probe committee was formed to investigate the stock market crash on 24 January

2011,with former Bangladesh Bank Governor Ibrahim Khaled heading the four-man

high-powered committee.

The committee provided their findings (320-page report) after three months, on 7 April. It

identified an array of chicanery performed by some 60 influential individuals that

resulted in the recent market crash57

. The committee interviewed all members of both the

DSE and CSE, and consulted journalists and analysts before presenting their report. The

committee found various irregularities, including the existence of omnibus accounts that

allowed some market players to make exorbitant profits at the expense of the retail

57 http://archive.thedailystar.net/newDesign/news-details.php?nid=181073

Source: The Daily Star. 12 October 2011

41

investors. Among the 60 identified primarily included chairman of Beximco and the

mastermind of the 1996 market crash Salman F Rahman, former DSE president Rakibur

Rahman, SEC chairman Ziaul Khandaker, SEC member Mansur Alam and others. There

have been allegations that the two influenced the SEC and lobbied for the appointment of

Ziaul Haque Khandaker as SEC chairman and reappointment of Mansur Alam as SEC

member. Salman lobbied the Bangladesh Bank governor to soften the central bank's

stance on BD-Thai Aluminium that had been involved in money laundering, said the

report. The report ended with recommendations to reform the SEC drastically and asked

the government to publish the names of the influential players and to remain cognizant in

countering their influences.

The probe committee report resulted in the dismissal of SEC chairman Ziaul

along with other SEC members accused. However, the Finance Minister AMA Muhith

stated that the State would neither disclose the names of the accused officially nor take

punitive measures without further investigation, although no dates for fresh probes have

been declared.

The military backed interim government in 2007 arrested about 200 businessmen and

industrialists and Salman was one of them. But when the Awami League led alliance

came into power, all charges against Salman and his brother was dropped by the courts.58

58 http://bangladesh-abc.hubpages.com/hub/Who-is-Salman-F-Rahman

42

Incidence Four: Corruption in Railway Ministry:

Taka 7 million ($86,000) bribery scandal was busted in an incident on April 9, 2012,

when the driver of minister‘s assistant personal secretary revolted and brought the vehicle

inside the headquarters of Border

Guards Bangladesh, where the

members of the paramilitary forces

unearthed the rocking case of the

bribery. The assistant personal

secretary (APS) and the senior

officials were en-route to the

minister‘s residence to deliver the

bribe money packed in a jute sack.

Suranjit‘s APS Omar Faruq Talukder was detained by the Border Guard Bangladesh

personnel in a car carrying Faruq and two top railway officials. These three persons were

released on the minister‘s intervention. However, the vehicle‘s driver Ali Azam was not

be seen anywhere since then59

. His family could not also say about his whereabouts.

Suranjit Sen Gupta, who enjoyed the status of a ―veteran parliamentarian‖, had finally

landed into the status of a corrupt political jackal in the eyes of the people at home and

abroad. Extremely corrupt minister in charge of the railway ministry in Bangladesh,

brief-less lawyer Suranjit Sen Gupta was finally axed from the post of the railway

59 http://www.thebangladeshchronicle.com/2012/04/where-is-ali-azam-asks-rafiqul-islam-miah/

43

minister following the huge bribery scandal. But restated in the cabinet without any

portfolio.

Resignation of Minister:

On April 15, 2012, Suranjit Sen Gupta was summoned at the official residence of the

Prime Minister, where he was asked to give explanations of the incident of April 9, 2012

night. Suranjit tried to defend himself with numerous stories, similar to those of what he

told the media since the scandal broke, while the Prime Minister did not buy such lies of

the railway minister and asked him to quit the post. Later he announced his resignation

following allegations that he took cash bribes from applicants seeking jobs on the state-

run railway.60

Sources in the railway said Rail Sramik League (Awami League railway

workers union wing), ministers, lawmakers, ruling party leaders and a section of corrupt

railway officials were taking bribes from job seekers. The railway ministry started

recruitment of 7,500 people.61

The veteran politician told a news conference that, "I am stepping down even though I

was not involved in the incident. A lot of people think if I stay at the helm of the

ministry, the investigation could be influenced,". The three officials had allegedly stored

the cash in the minibus - told local newspapers that they were going to Mr Sengupta's

house with the money.

Reappearance of the fraudulent in the cabinet:

60 http://www.bbc.co.uk/news/world-asia-17731121

61 Daily Amar Desh - 13th April, 2012

44

Government of Bangladesh Awami League had surely given birth to the biggest joke in

country‘s politics by restoring the ministerial position of extremely corrupt minister in

charge of the railway ministry in Bangladesh. Though Suranjit Sen Gupta was forced to

resign from the railway ministry, in an unprecedented manner, he was reinstalled in the

cabinet within 24-hours as minister without portfolio62

.

The mysterious bounce-back of Suranjit to the cabinet has generated more curiosity in

country‘s political arena than it did when the minister was caught red-handed on the bribe

scandal. It is rumored that two of the very influential political figures in India made calls

to Bangladesh government and expressed their annoyance over forcing Suranjit Sen

Gupta towards resignation63

.

They even reminded the government that prior to the general election in 2008, current

Prime Minister‘s son, Sajib Wajed Joy wrote in an article that Bangladesh Awami League

aspires in putting a Hindu leader into the post of country‘s Prime Minister, if voted into

power. One of the callers from India even said that, ousting Suranjit Sen Gupta would

simply prove that Bangladesh Awami League made such publicity with the motive of

getting sympathy of the minority voters64

. Being hapless with such harsh comments, the

government had no option but to bring Suranjit back into the cabinet.

62 http://www.thebangladeshchronicle.com/2012/04/suranjit-made-minister-again/

63 http://www.thebangladeshchronicle.com/2012/04/the-funny-resignation-game-in-bangladesh/

64 Ibid.

45

In this case, there is no room or space of any doubt that the head of the government in

Bangladesh, by playing the role of savior of a corrupt minister has surely put itself into

the role of an abettor of crime and corruption, which in no definition can be either

applauded or accepted either by sensible communities in Bangladesh or the world.65

Like father like son:

His corruption as well as corruption of his son and inner-circle cadres of him was already

within the radars of various intelligence agencies. The only son of the minister, Soumen

Sengupta, who served in a telecommunication company for TK 50 thousand monthly

salary established a telecommunication company of his own, when his father became the

railway minister66

. It was later reported in Bangladeshi and international media that

Soumen Sengupta turned into a neo-millionaire within the span of three odd months.

Soumen Sen Gupta paid TK. 50 million cash as license fees for obtaining a telecom gait

wait license from the Bangladesh Telecommunication Regulatory Commission [BTRC].

Neither Suranjit nor his son could give any satisfactory reply as to how Soumen suddenly

turned into a multi-millionaire, months after his father became the railway minister.

Suranjit‘s decision to submit his resignation was wise. Nonetheless, Prime

minister‘s decision to reinstate him was dumb and unacceptable. And of all politicians,

Sheikh Hasina ought to have known it better. If she truly cares about Bangladesh, she

should rescind her decision and allow the ACC to conduct its investigation unhindered

now, and not later after the party is voted out of power.

65 http://www.globalpolitician.com/print.asp?id=7397

66 http://bdinn.com/articles/bangladesh-ruling-elites-indulged-into-crime/

46

Crime and corruption always go hand in hand. Bangladesh, like many of the developing

countries, has her share of such vices that never seem to go away. According to the rules

set up by the government, the Anti Corruption Commission (ACC) cannot investigate a

minister, unless permitted by the President67

. Now with the reinstatement of Suranjit as a

minister, that door of an impartial inquiry into his alleged bribery/corruption by the ACC

is shut harshly. And that is unfortunate for a country that is trying to shed off its old

image as a corrupt country. Government should take warning what Rabindranath Tagore

had said years ago:

“Those who perpetrate injustice

and those who tolerate the same,

Let both burn into ashes,

My Lord, in Your ever wrathful flame …”?

67 http://www.thebangladeshchronicle.com/2012/04/bangladeshs-railway-gate-corruption-the-prime-minister-should-rescind-her-decision-to-reinstate-a-corrupt-minister/

47

Incidence Five: Income climb of MPs

Corruption by ruling party isn‘t something new in South Asian political history. For

centuries, rulers have exemplified serious and heinous actions of corruption and

mismanagement of wealth they were supposed to safeguard. In the Laws of Manu around

two thousands years ago or even The Kautilya Arthashastra, there are loads of examples

of such corruption piece. In one essay, Kautilya says68

:

―Just as it is impossible not to taste hone or poison that one may find at the tip of

one’s tongue, so it is impossible for one dealing with government funds not to

taste, at least a little bit of the king’s wealth….so it is impossible to find out where

government servents in charge of undertaking misappropriate money” (The

Kautilya Arthashastra, page 91)

Details of politicians' personal wealth came out at the end of last year, of those running

for Parliament in elections set for Jan. 5 had to declare their assets to the country's

Election Commission69

. The fact that some of them have become wealthy has outraged

many in this poor South Asian country, where the per capita annual income is around

$1,00070

. Just after being elected as MPs and minister, their wealth has increased many

times. Many people showed the amount of his wife‘s assets is more than him. They have

68 Kangle, R.P., The Kautilya Arthashastra (Bombay: University of Bombay, 1972), p.91.

69 http://123.49.39.5/asset2013/

70 http://www.thedailystar.net/law-against-errant-mps-4353

48

hid the information of actual amount of property provided in the affidavit. Rather than

discouraging such practice, the Finance minister of 14 party government AMA Muhit

says; ―History suggests that the ruling classes used to fatten their purses‖.71

―This is a

naked example of how politicians have turned politics into a profit-making process‖, said

Iftekharuzzaman, executive director of Transparency International Bangladesh.

Income escalation of MPs of Awami League government7273

:

Resigning of former Communication minister Syed Abul Hossain and bribe scandal of

Railway Minister Suranjit Sengupta hinted the corruption status that had been huge

during last five year regime of Awami Leage leading 14 party government. This has

become more evident with the declarations of wealth, submitted by the candidates

themselves for 10th

national election. It reveals that the personal fortunes of many leaders

of the Awami League have climbed, sometimes more than a hundredfold, when

compared with similar declarations submitted ahead of the last elections in 2008. "The

affidavits and tax statements [submitted to the election commission] show that at least 48

candidates who have served in important positions have seen a 582% rise in income on

average," said Badiul Alam Majumdar, the general secretary of Sushasoner Jonno

Nagorik.74

In the following part, unusual income rise of some of the members of 14 party

alliances is portrayed:

71 http://www.newagebd.com/detail.php?date=2013-12-25&nid=78010#.Ut45sRb87oA

72 http://shujan.org/2013/12/31/ - - - /

73 http://bdinn.com/news/anomalous-property-of-ruling-party-men/

74 http://online.wsj.com/news/articles/SB10001424052702304483804579284472425219860

49

General growth of income status75

:

During the last election on 5th

of January 2014, the numbers of candidates were 541.

While 154 seats being previously declared (having only one candidate), rest of the 146

seats had 387 candidates for 10th

national election. Personal information submitted to

Election Commission unveiled overall income rising tendency during last five-year

tenure. At least 48 candidates who have served in important positions have seen a 582%

rise in income on average. Income of the ministers rose 243 %, for deputy ministers 464

%, for deputy leader of National Parliament, Chief Whip and Whip 3071 %. Besides,

Prime Minister and Deputy Speaker‘s income increased 136% and 4435% respectively.

According to percentage account, income of Noor-E-Alam Chowdhury grow 32985%,

Abdul Mannan Khan 8422%, Mahbubur Rahman 8007%, deputy speaker of Bangladesh

Shawkat Ali 4435 %, Hasan Mahmud 2036% and Md Afsarul Amin 2480%.

Individual income growth:

Individual income account for some MPs and ministers of previous term (also running for

this term) is given below:

Abdul Mannan Khan:

Former state minister for housing and public works Abdul Mannan Khan, who had

reported having assets worth only Tk 10 lakh in 2008, reported assets worth Tk 11 crore

in the statement he submitted to the EC this time round.

75 http://issuu.com/dhakatribune/docs/131227214318-f46e3d922b254d58b2791dfde95edfe3

50

Hasan Mahmud’s wife:

Environment minister Hasan Mahmud‘s wife‘s income worth Tk 19 lakh annually in

2008, has shot up to Tk 2 crore in 2013. Former state minister for LGRD Jahangir Kabir

Nanak reported a rise in his asset value from Tk one crore to Tk 8.25 crore.

Mohiuddin Khan Alamgir:

Mohiuddin Khan Alamgir, a former home minister, declared a cash balance of more than

30 million takas. He had 500,000 takas in 2008, according to his earlier wealth statement.

Mahbubur Rahman:

Mahbubur Rahman, former minister for water resources, declared that he now owns

2,865 acres of land, up from 20 acres in 2008.

Mujibul-Haque-Chunnu:

Mujibul-Haque-Chunnu MP of Kishoregonj-3 and presidium member of Jatiyo Party (JP)

Mojibul Haque Chunnu‘s income have increased 8 times. His income was not mentioned

in the affidavit of 2008 parliament election. A bus as the source of income and TK 1 lakh

4 thousand from Saving Certificate (Shonchoypatra) were showed in his yearly income

information. His yearly income increased to TK 1 crore 8 lakh in 2013. He earned TK 96

lakh every year from his business. TK 8 lakh has been earned from his profession. But he

51

did not mention his salary as MP in the affidavit. His chattel was TK 44 lakh in 2008. His

wife possessed TK 19 lakh. He showed 5 KATHA land at Tongi in his wife‘s name as a

fixed asset. The value of this property is TK 4 lakh 47 thousands. Possessed a portion of

the ancestral home has mentioned. His chattel was increase to TK 1 crore 45 lakh in

2013. Among this TK 37 lakh is in cash. His wife‘s chattel was increased 4 times turned

into Tk 79 lakh and fixed assets increased to TK 82 lakh. Non-agricultural land worth TK

4 lakh 47 thousands in the name of his wife showed in his property details.

MP Kamal Ahmed Mojumdar:

Detail information of immovable property of MP Kamal Ahmed Mojumdar (Dhaka-15)

has not been given in the 10th National Assembly elections affidavit. In 2008 his fixed

asset was TK 3 crore 94 lakh 25 thousand 476. His wife had TK 4 lakh 50 thousand.

Besides, he mentioned about a tea garden, rubber plantation and fish farm. His annual

income is TK 1 crore 21 lakh 94 thousand 830 in 2013. He didn‘t mention his

honorarium which he got as a MP. In addition, TK 14 lakh has been shown as income

from other sources. In 2008, his income was around TK 59 lakh 35 thousand. His family

members income was TK 16 thousand 825. He and his wife‘s chattel was TK 1 crore 77

lakh 98 thousand 827. In 2013, his chattel stands in TK 5 crore 89 lakh 35 thousand 144

lakh. 22 different cases have found against him.

Minister Raziuddin Ahmed Raju:

52

Former Labour and Employment Minister Raziuddin Ahmed Raju‘s wife has more

property than him. According to the election commission affidavit in 2013, his annual

income is TK 17 lakh 22 thousand 300 which he got as honorarium. Without it no income

was shown in his affidavit.

According to the affidavit, Raziuddin Ahmed has movable assets of TK 57 million 87

thousand 983 in cash oh himsef. His wife has TK 48 lakh 33 thousand 953 in cash. He

and his wife have TK 50 thousand and TK 20 lakh savings in the bank respectively. Razu

has jeep cars valued at TK 91 lakh 60 thousand. He and his wife has TK 60 thousand of

gold. His electronic equipment value is TK 1.5 lakh. His own furniture value is TK 1 lakh

20 thousand and wife has TK 20 thousand. Raju has a shotgun and revolver. In

Narshingdi, Raypur he has 3.5 bigha farmland as collective ownership. By the name of

Raziuddin Ahmed‘s wife has multiple houses and land. Although one land in Dhanmondi

has been mentiontioned in the affidavit and its price is TK 19 lakh 16 thousand 667.

Besides, a six storeyed building (one-third) in Gulshan and another three storeyed

building in Eliphant road has been shown in the name of his wife. Gulshan house prices

have been mentioned TK 58 lakh 95 thousand. But truly the price of this land and

buliding is much more. In the affidavit he also mentioned that he has a two storeyed

building with collective ownership on 14 katha land in Banani. Though there is no

information about price.

Golam Faruk Khandaker Prince:

53

The value of immovable property of AL leader Golam Faruk Khandaker Prince MP

(Pabna-5) is currently TK 84 lakh. There was no information of his immovable property

in the affidavit of 2008. TK 9 lakh 6 thousand comes from business and TK 10 thousand

260 from share business. But he did not mention the amount of honorarium obtain as the

Member of Parliament. The worth of his chattel was approximately TK 31 lakh in 2008.

It has become doubled turned into TK 64 lakh in 2013.

Dr. Dipu Moni:

Dr. Dipu Moni is the former foreign minister. She was foreign minister throughout the

full 9th parliament term. Fortunate Dipu Moni possessed the foreign ministry after being

elected as MP first time in her life. She has traveled to various countries around the

world. Many people think that she has scored a world record for foreign trips. The

property worth TK 5 lakh increased to TK 84 lakh 2 thousands and 151 within five years

of this most widely discussed former minister. Her husband‘s assets increased TK 8 lakh

80 thousands in this period in association with a luxurious car, 10 KATHA land worth

TK 30 lakh in her own name including gold worth TK 8 lakh and many others worth.

She is again Awami League (AL) party candidate from Chadpur -2. Chadpur district all

candidates including she enlisted to the unopposed 154 candidates in the Tenth National

Assembly election. Although five years ago professional annual income of Dr. Dipu

Moni was three lakh, this time she received yearly TK 17 lakh 20 thousands just as the

payoff allowance from the ministry.

54

Of movable assets, TK 1 lakh 50 thousand cash under her own name and TK 4 lakh in the

name of her husband. Five years ago this amount was TK 2 lakh 70 thousand in her own

name and TK 8 lakh 75 thousand under her husband. Although in previous they did not

have money, five years later now she has TK 15 lakh 97 thousand 288 in the Bank and

financial institutions in her own name and according to the tax return record of 2012-

2013 session her husband has TK 5 lakh 30 thousand. In the savings certificate, she has

TK 22 lakh 54 thousand 863 in her own name and the furniture worth has become

doubled turned into TK 1 lakh.

Furthermore her husband has TK 8 lakh 75 thousand mentioned as miscellaneous. During

the tenure of these five years tangible assets comprise of 10 KATHA non – agricultural

land worth TK 33 lakh has been added under her own name. Pervious non – agricultural

land worth TK 40 lakh 50 thousand has been cited as not applicable mentioning two flat

of same price in replace.

Aslamul Haque:

Class eight passed Dhaka-16 AL party MP Aslamul Haque has become the owner of

hundred crore worth. Own name as well as his wife has owned assets worth hundreds of

crore by doing the business of land developments, real-estates, chemicals import,

consumer products and trading.

According to the affidavit of 2008 parliament election, MP Aslam‘s total taxable income

was TK 2 lakh 83 thousand 500. Of those he paid tax TK 11 thousand 850. Mirpur MP

55

Aslam‘s present worth has multiplied several times. According to the sources of annual

income, Aslam‘s yearly income TK 2 lakh 83 thousand 500 and his wife earns TK 2 lakh

15 thousand 700 as an annual basis. But his wife‘s profession was not mentioned. Besides

he has possessed plentiful of tangible wealth.

In 2008, MP Aslam had only cash TK 15 thousand 700. Now he has cash TK 2 crores 13

lakh 19 thousands 039. In addition to this, his wife has cash TK 57 lakh 82 thousands 9.

His Bank savings amount was about TK 8 lakh in 2008. At present, though he has TK 24

thousands 43 in Bank, his wife‘s Bank saving is TK 34 lakh 85 thousands 506.

His chattel record shows that he has TK 85 lakh 27 thousands 500 in terms of Bond,

Debenture and Shares of stock exchange listed and unlisted companies. Moreover, his

wife has shares worth TK 11 lakh 40 thousands. His fixed deposit amount is TK 12 lakh

61 thousands 500 invested in different type of saving certificate including postal savings

certificate. Additionally his wife has TK 54 lakh 63 thousand 429 in the same investment

sector. In the transport business, TK 87 lakh is on his own name and TK 14 lakh 50

thousands under his wife‘s name. Both of them possess totally 83 ounce gold whose

worth was not mentioned.

In addition, he earned TK 7 lakh 25 thousands 873 and his wife earned about TK 9 lakh

from other miscellaneous sectors. He has become the owner of land worth of several

crores in five years. In 2008, he has 2 BIGHA and his wife has 3 BIGHA land. Currently

MP Aslam possesses 14 thousands 178 decimal land and his wife is the owner of 390

56

decimal lands.

Furthermore, MP Aslam earns annually TK 1 crore 53 lakh form house rent. In this

affidavit of property details, he did not point out about 52 BIGHA land at Gabtoli which

was mentioned in 2008.

Mamataj Begam:

Likewise singer Momtaz Begum is AL MP in the ninth parliament reserved seat for

female. Class ten passed Mumtaz has built immense wealth. She uses Land Cruiser. Now

she is going to be elected MP form Manaikganj-2.

Mentioned singing as a profession. In the affidavit of 2008, she showed TK 26 lakh 85

thousand 43 earned from business and TK 40 thousand from agricultural sector. At

present her income has increased several times. Her present car price is more than her

annual income. She also uses Toyota Land Cruiser worth TK 65 lakh 6 thousand 250. In

the same way, she earns TK 70 thousands from agricultural sector and TK 10 lakh 84

thousand 953 from the business. But she did not mention which type of business she has.

Her Bank savings have also increased. At this time she has Bank saving TK 30 lakh

whereas this value was about only TK 50 thousand in 2008 and now she has 35 ounce

gold ornaments. She did not point out about agricultural land worth TK 23 lakh 46

thousand 735 which was mentioned in 2008.

57

Presently she earns TK 3 lakh 30 thousand from her profession which was not mentioned

in 2008. In addition to this, she received yearly TK 34 lakh 41 thousands 881 just as the

MP payoff allowance.

Members of Parliament get a salary of 27,500 takas ($350) a month and an annual

allowance of 300,000 takas for transportation and other expenses. But regrettably, the

performance that they demonstrate after the end of each term, seem incredible for only to

themselves but frustrating for the whole nation. For MPs of last AWL regime (14 party

government), properties anomalously turned into multiple times within five years.

Amount of growth of some people‘s property is incredible. It‘s like we are letting the fox

guard the hen house, consciously or subconsciously. It reminds us the quote of Will

Rogers:

“We should never blame the government for not doing something,

It is when they do something is when they become dangerous” - (The Wit and Wisdom of

Will Rogers: p.93)

58

Incidence Six: Rana Plaza: an example of failed governance

On 24 April 2013, Rana Plaza, an

eight-story commercial building,

collapsed in Savar, a sub-district in the

Greater Dhaka Area, the capital of

Bangladesh. The search for the dead

ended on 13 May with the death toll of

1,13276

. Approximately 2,515 injured people were rescued from the building alive. t is

considered to be the deadliest garment-factory accident in history, as well as the deadliest

accidental structural failure in modern human history.77

The building contained clothing factories, a bank, apartments, and several other shops.

The shops and the bank on the lower floors immediately closed after cracks were

discovered in the building. Warnings to avoid using the building after cracks appeared

the day before had been ignored. Garment workers were ordered to return the following

day and the building collapsed during the morning rush-hour.

The building, Rana Plaza, was owned by Sohel Rana, allegedly a leading member of the

local Jubo League, the youth wing of the ruling Awami League political party.78

It

housed a number of separate garment factories employing around 5,000 people, several

76 http://archive.thedailystar.net/beta2/news/rana-plaza-collapse-a-governance-failure/

77 "Bangladesh building collapse death toll passes 500". BBC News. 3 May 2013.

78 http://bdinn.com/news/sohel-rana-the-man-behind-the-savar-tragedy/

59

shops, and a bank. The factories manufactured apparel for brands including Benetton,

Bonmarché, the Children's Place, El Corte Inglés, Joe Fresh, Mango, Matalan,Primark,

and Walmart.79

As of mid-September 2013, compensations to families of disaster victims were still under

discussion, with many families struggling to survive after having lost a major wage

earner80

. Families who had received the $200 compensation from Primark were only

those who were able to provide DNA evidence of their relative's death in the collapse,

something which proved extremely difficult. 81

Of the 29 brands identified as having

sourced products from the Rana Plaza factories, only 9 attended meetings held in

November 2013 to agree a proposal on compensation to the victims. 82

The Rana Plaza collapse was an outcome of the governance failure in the society. It is

bad politics, injustice to workers, global competitive pressure and unfair working

conditions that led to the deadliest factory accident that claimed 1,132 lives, said Prof

Rehman Sobhan, chairman of Centre for Policy Dialogue. 83

Who is this Sohel Rana?

79 http://en.wikipedia.org/wiki/2013_Savar_building_collapse

80 http://www.bbc.co.uk/news/world-asia-24042776

81 http://www.bbc.co.uk/news/magazine-24080579

82 http://www.dhakatribune.com/business/2013/nov/17/buyers’-compensation-rana-plaza-victims-far-reality

83 http://archive.thedailystar.net/beta2/news/rana-plaza-collapse-a-governance-failure/

60

The people of Savar knew Sohel Rana as the person who became the Jubo league Leader

(Awami youth Wing) of Savar all of a sudden. He was the son of Khaleq Kolu. He‘s

father was from the Singay Upozila of Joymondop village in Manikganj District. Only

two decades ago his penniless father Khaleq Kolu left his home land in search of a better

life in Namapara, Savar. He started a little business of making mustard oil by crushing

mustard seeds himself and later selling them to make enough money to feed the family.

Rana use to help his father with making the mustard oil. Rana left school in year 8 and

grew up to be a very despicable young man by joining the local terrorist group. Overnight

Rana accumulated a huge mountain of black money from an unseen power. He became

well known as the illegal occupier of people‘s lands. Multi storey buildings started to

grow one after another in his name. The 9 Story Rana Plaza, 9 Story Rana Tower and a 5

Storey Residence building for himself were among a few of his assets.84

He was the Ex Secretary of Chatrolegaue (Awami student wing) in Savar before his

current position as the Jubo league convenor for the city of Savar. He is very closly

associated with the Savar Awami League MP, Talukdar Tawheed Jong Murad, who has

helped him to accumulate all this wealth.

The land where Rana plaza was illegally built, was originally owned by a hindu man by

the name of Naryanchondro. He was later referred to as ‗pagla‘ since he became mad as a

result of being thrown out of his lands. Even though no formal complaint was made

against Rana (as they were threatened with death), hes name was mentioned in three

84 http://bdinn.com/news/sohel-rana-the-man-behind-the-savar-tragedy/

61

separate incidents of murder in Savar.85

The basement of Rana Plaza was also used for

various other purposes. It was used as a storage for drugs and Wine containers imported

from India bought through the Indian border in Jessore.

He was arrested by RAB (Rapid action Battalion force) on the 29th of April with a huge

possession of alcohol in Benapol, Jessore near the Indian borders as he was fleeing to

India. He‘s arrest was made based on a simple building construction code act which gives

a maximum sentence of 5 years imprisonment and a fine of Tk 50,000 only.

85 Ibid.

62

Incidence Seven: Corruption sweeping in Universities:

Some of the country‘s prestigious higher educational institutions have become hubs of

unrest, bringing uncertainty to the academic lives of nearly a million students.

Politicization of top university posts is a major cause of the upheaval while

administrative failure and corruption also play significant roles, according to analysts.

The list of troubled campuses includes public universities, colleges and polytechnics, all

of which are reeling from serial unrest and instability. Critics say such unrest, in most

cases, is created by the people at the helm of the institutions. The ruling party-backed

students‘ organizations are also contributing to the situation by engaging in violence and

intimidation.

Overall, as many as 20 public universities, 35 colleges under the National University and

8 polytechnic institutes are reportedly facing crisis for which most of their teachers and

students blame the political appointees and the ruling party‘s student wing, Bangladesh

Chhatra League.86

At present, instability reigns in Bangladesh University of Engineering and Technology

(BUET), Jahangirnagar University, Dhaka University, National University, Rajshahi

University, Pabna University of Science and Technology, Government MC College in

Sylhet and Dhaka University of Engineering and Technology, among others. Two of the

86 http://www.dhakacourier.com.bd/?p=7776

63

most critical events during last regime of 14 party alliance government in Universities are

exposed below:

Case # 1:

BUET in Crisis:

Throughout the latter part of 2012 the crisis at Bangladesh University of Engineering and

Technology (BUET) persisted, as agitating students remain firm on their demand for

removal of the vice-chancellor.

They earlier leveled 16 allegations against the vice-chancellor and the pro-vice-

chancellor. An internal investigation committee found irregularities in the

administration. Another committee, set up by the syndicate later, did not corroborate the

findings of the previous committee. Rejecting the latest committee set up on May 3,

the teachers resumed the strike and had rallied for 28 days. The strike was called off on

May 5 on an assurance of the prime minister.87

But still now the VC has not yet been

removed from his post, that many believe as his gift of loyalty to current ruling

government.

87 http://newagebd.com/detail.php?date=2012-07-14&nid=17038#.UuDAQBb84b0

64

Background breach of VC S M Nazrul Islam:

It was not new for the current VC to

manipulate the University with Partisan

attitude. When Bangladesh University of

Engineering and Technology (BUET) VC

Dr. S M Nazrul Islam was the VC of Khulna

University (KU), he appointed 70 persons

including his close relatives in the university

administration by enforcing his power. They are still seated on those important posts of

the university. They have made the university as their plundering field. Earlier BUET VC

said about this, he has not done any corruption in BUET or KU. Still now, he resolves the

way of different problems solution of KU.

It is informed that, for the recent occurrence of land selling of KU, the chief of property

department Ali Akbar has been terminated from his post. He was then the PS of the

BUET VC. Sources also informed that, the officials appointed by him are related with the

land selling occurrence, they have formed a group in this matter. BUET VC is trying to

ensure their safety by enforcing his power88

Commencement of strike in BUET:

On April 7 in 2012, BUET Teachers' Association launched an agitation, including work

abstention, bringing 16 allegations of corruption against the VC and pro-VC. The

88 http://www.eduicon.com/News/Details/?News_ID=521

65

teachers and students of BUET (Bangladesh University of Engineering & Technology)

are in an all out movement to oust VC and Pro-VC Students from mid-July.89

The

employees and Alumni also joined the movement. On 11 July 2012, 24 senior teachers

including 16 chairman of Departments, 5 deans of Faculties and 3 Directors of

Institutions have resigned from their posts in protest against the irregularities of VC and

Pro-VC90

.

Some of the teachers who resigned told The Daily Star that they had done so for the sake

of the students' and the institution's future. "There is no atmosphere to work under the

incumbent administration. The vice-chancellor has been involved in controversial

activities one after another since he assumed office," said Prof Shakil Akhtar, chairman

of the department of Urban Rural Planning.

According to the teachers, the university authorities' appointment of Habibur Rahman, a

professor of the civil engineering department, to the post of pro-VC was based solely on

his political affiliation.The university authorities violated the BUET custom of

maintaining seniority regarding promotions and appointments, claimed the teachers'

association, adding that the VC had begun a massive restructuring of the university

administration since he took over on August 31, 2010. They claimed that Deputy

Registrar Kamal Ahmed had been appointed to the post of interim registrar through

violating university convention. They also charged that the administration had changed

89 http://archive.thedailystar.net/newDesign/news-details.php?nid=248401

90 http://archive.thedailystar.net/newDesign/news-details.php?nid=241773

66

the scores of two students.91

Counter action from VC:

Some 195 demonstrators were sued for their alleged involvement in capturing and

vandalizing offices of VC and pro-VC of Bangladesh University of Engineering and

Technology (Buet) and looting documents. BUET chief security official Golam Kuudus

Khan filed the two cases accusing them with Shahbag Thana on Sunday (2nd

September

2012) night.92

However, Prof Nazrul Islam, the embattled vice-chancellor of Bangladesh University of

Engineering and Technology (BUET), threatened to outsource and hire teachers from

outside to run academic activities of the institution. His comments came one day after

one day after the agitating teachers threatened to resign en masse if their demand is not

met.93

―If the teachers, who are demonstrating against me unnecessarily, resign, the university

authorities will have no option but to hire or outsource teachers from outside, mainly

from private universities,‖ he said. He also mentioned two other options two bring in

teachers—first by calling back the teachers who are currently on education leave and

91 http://archive.thedailystar.net/newDesign/news-details.php?nid=241773

92 http://www.daily-sun.com/index.php?view=details&archiev=yes&arch_date=03-09-2012&type=2-cases-filed-against-agitating-Buet-teachers-students-on-charge-of-ransacking-VC-office&pub_no=250&cat_id=4&menu_id=0&news_type_id=3&index=17

93 http://www.theindependentbd.com/online-edition/121379-if-necessary-we-will-outsource-teachers-buet-vc.html

67

secondly the teachers who are on deputation in different government works. The agitating

teachers took the decision of resigning en masse hours after Education Minister Nurul

Islam Nahid held a meeting with BUET‘s 25 deans, institute and department heads,

former students and vice-chancellors at the ministry's conference room and it ended

without a solution.

Student’s reaction:

Around 1,000 students of the institution holding banners expressed their solidarity with

the agitating teachers. Parading the campus streets, they gathered in front of the

administrative building and held a rally there. The banners read: ‗We want corruption-

free BUET,‘ ‗We want corrupt VC and pro-VC removed,‘ ‗Take our classes, please,‘

‗We‘ve not take admission to BUET to face such a situation‘ and ‗Sparkle in our

sleepless eyes, confidence in our soul/ We are BUETIANS/ We bet we‘ll reach our goal.‘

A number of BUET alumni, including the Bangladesh Paribesh Bachao Andalon joint

secretary, Iqbal Habib, former REHAB president Tanvir Probal and the first vice-

president of BUET‘s hall for female students Sayida Sultana visited the campus on

Friday and expressed their solidarity with the demand of the teachers.

BUET is our pride. It is the best university in the country and has the best ranking among

our universities. Since the teachers, students and staff of the university started agitation

demanding resignations of the VC and his deputy, academic activities totally came to a

halt and the university faced an unexpected closure. After 44 days of break the university

opened on August 25 in 2012, but no classes have been held since. The announcement of

68

the closure of the university came at a time when the teachers' association had given an

ultimatum for the VC and pro-VC to resign. The crisis BUET is deepening and if it is not

solved in time, it will be an embarrassment for the Government also.

Case #2:

Jahangirnagar University: another example of Partisan Autocracy

The overall situation at Jahangirnagar University (JU) is yet to be normal even though

nearly two months have elapsed since the resignation of former Vice- chancellor Sharif

Enamul Kabir in the face of a five-month-long teachers-student movement. JU is also

facing instability as a section of teachers are opposing the appointment of an ‗outsider‘ to

the post of VC. Dr. Anwar Hossain, a professor of Dhaka University, was made VC of JU

on May 17 in 2012. President Zillur Rahman finally appointed Prof Anwar Hossain as

the vice-chancellor of Jahangirnagar University for four years from an elected three-

member panel.94

Allegations and Accusations against VC Shariff

Apart from indiscriminately chopping down trees

over the last three years, Prof Shariff leased out

the university lakes, compromising the beauty of

the campus, teachers and students had alleged.

94 http://campusnews.com.bd/dhaka/juniv/954

69

During his tenure, he appointed over 196 teachers, many of whom were less qualified and

selected on political considerations. The authorities under his administration also allowed

the admission of 78 ward-quota-admission seekers who even failed to get the pass marks

in the 2011-12 session.95

Teachers and students started demanding his removal after the murder of Zubair Ahmed,

a student of the English department, by some BCL activists on Jan 9. It is alleged that

those involved in the murder received Prof Shariff's blessings on many occasions. On 10

March in 2012, a large number of teachers and students of the university joined in force

to gear up the movement. Under the banner of Shikkhak Samaj, agitating teachers

enforced a strike in the university while students launched a fast-unto-death on April 24

demanding the ouster of Prof Shariff.96

On May 4, teachers postponed their

demonstration on assurances from Prime Minister Sheikh Hasina that she would look into

the matter.

However, Former VC Shariff Enamul Kabir was somehow ―rewarded‖ by the Govt.,

when he was appointed as the Member of Public Service Commission by the President,

right after the appointment of the New VC at Jahangirnagar University. Many people

consider this as a prize of loyalty for him!

95 http://www.amardeshonline.com/pages/details/2012/06/18/150198

96 http://bangla.bdnews.com/news/11623

70

Resigning of Dr. Anwar Hossain:

Removal of Shariff Enamul Kabir

(previous VC) did not improve overall

corruption situation and favoritism

practice within administrative circle of

VC. The overall situation at

Jahangirnagar University (JU) went

anomalous since the resignation of

former Vice- chancellor Sharif Enamul Kabir in the face of five-month-long teachers-

student movement.

Due to the teachers‘ movement of the JU teachers, Prof Anwar Hossain resigned from his

post on January 12, 2014. Sources alleged that, Prof Anwar Hossain was a non-

academic person such way his Vice Chancellorship has fallen the university into a deep

crisis. Md Anwar Hossain- a professor of the department of Microbiology & Molecular

Biology of Dhaka University was appointed as the JU VC on May 17, 201297

University teachers along with a section of students and staff had been staging

demonstrations since April 27, 2012 demanding resignation of Anwar Hossain, accusing

him of not taking punitive action against university unit Chhatra League general secretary

Razib Ahmed Russell for assaulting lecturer Nurul Haque, also a syndicate member, on

April 6.

97 http://www.bdchronicle.com/detail/news/32/3744

71

He had been carrying out his duties from his Uttara residence since December 16 last

year as the agitating teachers forced him to leave the campus. Jahangirnagar University

Teachers‘ Association, General Teachers‘ Forum and Teachers-Students-Officers-

Employees Unity Forum observed strike and work abstention demanding his resignation.

They also staged sit-in in front of the vice- chancellor‘s house day after day and finally

declared him persona non grata on the campus. Following a petition filed by four

teachers and a student, the High Court on July 24 in 2013 asked the authorities concerned

to immediately take necessary steps for the continuation of day-to-day functions of the

university. Even though the association called off its agitation on July 30, General

Teachers‘ Forum continued with the movement brining various allegations against the

vice-chancellor. Later, the government had formed an inquiry commission which

submitted its report on October 1 last year.

It‘s strange how students have actually stayed calm and gone through the repeated

injustice. In a South Asian country that is still dominated by the conventional doctor-

engineer-lawyer career bracket, having these nearly crippling down has left millions

uncertain and frustrated. To what gains they deserve this is another debate, and frankly,

not one that can ever resolve the futile, power-hungry and ridiculous decisions of our

political players. While the government has finally removed the Pro Vice Chancellor of

BUET from his position98

, protests are still going on. The Vice Chancellor has still not

been removed, leaving teachers and students as agitated as they were before. In JU, there

is still confusion of selecting new VC , given the vices that last two VCs have validated.

98 http://archive.thedailystar.net/newDesign/news-details.php?nid=249104

72

How can anything operate if the next generation of leaders spends most of their time

fighting for their basic rights and offering logic to administrations and governments? To

what degree must we tolerate corruption when the security and sanctity of young people

are at stake? How can student bodies function at the violent dominance of political

‗youth‘ wings?

Conclusion:

Corruption and oppression went hand in hand in last Awami League regime. Oppression

in the political field with extra judicial killing of anti government protesters and forced

disappearances are fuelled by the economic corruption in other sectors. Ruthless leaders

piled up wealth at the cost of bankrupt investors and small business holders. If properly

investigated, corruption can be found at every sectors of the Awami League government.

It is now a matter of time when mass movement to be routed against this despotic

government for the sack of justice and fairness.