High Court forms new board to revive scam-hit People’s Leasing

Lawyer Kamal-ul-Alam.
The High Court has formed a new board of directors for People’s Leasing and Financial Services Ltd or PLFSL after deciding to revive the scam-hit company instead of liquidating it.

Senior lawyer Kamal-ul-Alam will head the 10-strong board as chairman while Mohammad Jalaluddin, former managing director of Ansar-VDP Unnayan Bank, will work as the PLFSL managing director.

The members are former secretary Anwarul Islam Sikder, former senior district and sessions judge Hasan Shaheed Ferdous, former Pubali Bank managing director Abdul Halim Chowdhury, retired army officer Brig Gen Kazi Taufiqul Islam, fellow chartered accountants Noor-e-Khoda Abdul Mobin and Mowla Mohammad, depositors’ representative Dr Nashid Kamal and Nurul Kabir, chairman of North South University’s finance department.

The virtual bench of Justice Muhammad Khurshid Alam Sarkar formed the board in an order on Tuesday, with a set of instructions for the depositors, borrowers, the Bangladesh Bank governor, and the chairmen of Bangladesh Securities and Exchange Commission and Anti-Corruption Commission.

The judge decided to revive the company on Jun 28 after hearing a petition put forward by 201 depositors of the beleaguered lender.

The petition claims there is no legal basis to wind up a financial institution, but Bangladesh Bank could integrate the financial institutions and, through proper management, protect the interests of depositors.

If decisions relating to People’s Leasing are delayed it will “cause further damage to depositors”, the petition said.

The company’s operations were thrown into disarray after Proshanta Kumar Halder, former managing director of NRB Global Bank and Reliance Finance Ltd, fled abroad after embezzling Tk 35 billion in loans from several financial institutions, including People’s Leasing.

On Tuesday, the High Court ordered the new PLFSL chairman to call the first board meeting after consulting the members and Md Asaduzzaman Khan, who had been appointed as the probational liquidator for the firm.

The new board can review decisions on rescheduling default loans by checking the borrowers’ explanations.

The new managing director can reappoint officials who were not linked to OK Halder or other directors involved in the scam. 

The depositors cannot demand a refund in the next six months, but the board can repay on humanitarian grounds.

The central bank governor will seek incentives from the government to revive the firm. If the government does not respond positively to the request, the governor can restructure PLFSL or merge it with another financial institution.

The borrowers must make a down payment within the next 30 days. If they fail to pay, they will have to explain the reasons behind the failure in the court.

The judge set Aug 22 to issue the next orders.