Bangladesh News

Former law minister Moudud Ahmed bent rules to help WorldTel scamster Nayeem Mehtab Chowdhury obtain a Tk 15-crore loan from Sonali Bank with forged documents and without any collateral in 2005, according to an investigation of the Rapid Action Battalion (Rab).

Arrested on November 6 for large-scale financial crimes, Nayeem wielded so much political influence that he made Moudud use the Ministry of Law to give legal opinion in his favour so that he could obtain the loan, based on forged documents of WorldTel.

Rab brought specific charges against Nayeem, a self-declared managing director of WorldTel Bangladesh, for draining out Tk 15 crore from Sonali Bank and Tk 35 crore from National Bank of Pakistan forging the signature of Sam Pitroda, chairman of WorldTel Holdings Ltd (WTHL).

“Rab is now preparing to file another case accusing Nayeem of defrauding local National Bank Ltd of at least Tk 11 crore,” said a well-placed Rab source Sunday.

The source added, “When there is solid proof, we will not spare any political or non-political bigwigs involved in Nayeem’s elaborate financial scams.”

Documents show that in dealing with the Sonali Bank loan, Moudud bent Chapter III of the government’s Rules of Business that allows the law ministry only to give legal advice for other ministries or departments and not for private citizens.

Using his connections with BNP Senior Secretary General Tarique Rahman, son of former primer Khaleda Zia, and ex-state minister for home Lutfozzaman Babar, Nayeem additionally involved Dhaka deputy commissioner and the finance ministry to help Moudud provide the legal coverage for the loan. All of it happened at an amazing pace in the month of May, 2005.

Nayeem had the law ministry on May 14, 2005 write to the Dhaka deputy commissioner to suggest that the finance ministry ask the law ministry for its legal opinion on the guarantee for WorldTel’s Tk 15 crore loan. The deputy commissioner obliged on May 16, 2005. The finance ministry on May 24 asked the law ministry to give a legal opinion.

Under the signature of Moudud Ahmed, the law ministry gave its legal opinion on May 29, 2005 in favour of WorldTel. “The most remarkable thing about this opinion is that it contained seven signatures–all signed on May 29, 2005. The signatories included the then state minister for law Shahjahan Omar and the then secretary Md Alauddin Sarkar,” said a source.

WorldTel is a US company that signed a land-phone agreement with the government in 2001 but till date has not brought in any foreign investment or offered its service to the people. But in the last seven years, WorldTel Bangladesh ventures shares were sold out to different people while Nayeem used the name of WorldTel and siphoned off more than Tk 60 crore from various banks using forged documents.

Though the WorldTel’s mother organisation in the USA had repeatedly warned Bangladesh Telecommunication Regulatory Commission (BTRC) that Nayeem Mehtab Chowdhury did not hold any position in the company, the BTRC had been giving him full support without any question and thus allowed him to commit various financial crimes.

Nameem commanded a strong lobby during the four-party alliance government tenure. After the changeover of the government, he still had strong connections at the BTRC. One of his high-paid employees includes the son of a powerful man at the Anti-corruption Commission (ACC) and he had long remained untouchable by the law enforcers. The majority shareholder and the genuine Managing Director of WorldTel Amjad Hossain had been accusing him of forgery and cheating since 2006, but even the police would not accept his case.

However, following a deep investigation into the allegations against him, Rab arrested him on November 6 on specific charges and proof, making it very difficult for his powerful lobbies to have him released.

HOW THE SCAM WAS ORCHESTRATED
Under pressure from the top level of the government, Sonali Bank sanctioned a Bridge Finance loan of Tk 15 crore to WorldTel Bangladesh in early 2005. As per sanction terms of the loan, WorldTel Holdings Ltd, Bermuda has to execute the charge documents and provide corporate guarantee in favour of WorldTel Bangladesh as guarantor of the entire amount of loan.

WorldTel Bermuda had its documents and its guarantee notarised by notary public Bermuda and verified by the attorney general’s office of Bermuda.

Upon scrutinising these documents, Sonali Bank’s legal adviser pointed out that these WorldTel Barmuda documents must bear the attestation of Bangladesh Consulate Office in Bermuda.

Sonali Bank on February 15, 2005 in a letter to the foreign ministry inquired whether there was any embassy or consulate office of Bangladesh in Bermuda that could attest WorldTel Bangladesh’s loan application which was being guaranteed by the company’s Bermuda affiliate.

The legal adviser was quoted in the letter as saying, “The charge documents and the corporate guarantee, on my vetting are not found to be in compliance with the legal requirements. To be effective in law, these documents must bear the attestation of the Bangladesh Consulate Office in Bermuda. After attestation by the Bangladesh Consulate in Bermuda, these documents will have to be attested again by the Ministry of Foreign Affairs, Government of Bangladesh in Dhaka. Thereafter, the charge documents and the corporate guarantee will require revalidation under our law by affixing appropriate non-judicial stamps through treasury challan. After affixing necessary stamps, these documents will have to be filed with the Registrar, Joint Stock Companies pursuant to the provisions of the Companies Act.”

In reply, the foreign ministry–strangely–on the same day on February 15, 2005 told the bank, “We have no consulate office in Bermuda or similar arrangement thereon.”

Then as part of an elaborate scheme, Dhaka’s Deputy Commissioner Md Abdul Bari on April 28 sent a letter to the law ministry seeking its opinion on this guarantee. On May 14, 2005, the law ministry in a letter to the deputy commissioner said that since the rules of business do not allow the ministry to give opinions on private citizen’s case, it can do so if such an opinion is sought by the finance ministry. The deputy commissioner acted on May 16 and the finance ministry obliged on May 24.

Then the law ministry in a two-page legal advice okayed WorldTel Bermuda’s guarantee. Using an unconvincing argument, the law ministry wrote that WorldTel Bermuda is affiliated with WorldTel Bangladesh, which is registered under the 1994 Company Act. “Therefore, WorldTel Bangladesh can be considered as a reliable organisation for attesting the signatures of the corporate guarantee and charge documents of WorldTel Holdings Bermuda.”

It mentioned that already the deputy commissioner of Dhaka did not object to attest the signatures in question. Therefore, if it (WorldTel Bangladesh) takes the responsibility to answer any question in case of a problem related to the issue, the authorities may affix appropriate non-judicial stamps through treasury challan to the relevant documents.

Based on this legal opinion, Sonali Bank released the loan to Nayeem Mehtab Chowdhury.