The High Court has thrown a lifeline to People's Leasing and Financial Services Ltd (PLFSL) as it constituted a 10-member board to run the troubled non-bank financial institution, thus saving it from potential liquidation.

On June 28, the HC bench of Justice Muhammad Khurshid Alam Sarkar said it would pass an order to revive PLFSL instead of winding it up as its 201 depositors collectively filed an application seeking restructuring of the company.

In the full text of the order released on Monday, the court also issued several directives on the board, borrowers, and the Anti-Corruption Commission (ACC) to smoothly run the company.

PLFSL, which commenced its operation in 1996, faced a wide range of financial scams from 2004, which forced the central bank to appoint an observer in 2015.

In addition, the central bank removed five directors of the NBFI in 2015 for their alleged involvement in the embezzlement of Tk 358 crore.

Despite that, the central bank failed to restore corporate governance in PLFSL. In the meantime, the financial health of the NBFI continued to worsen.

The liquidation process began after the board of PLFSL informed the BB in April 2019 about its inability to pay back the depositors' money despite the maturity of the deposits.

Now, the HC has appointed Kamal-Ul-Alam, a senior lawyer of the Supreme Court, as PLFSL chairman and Mohammad Jalaluddin, a former managing director of Ansar VDP Unnayan Bank, as managing director.

Other eight directors of the board are Anwarul Islam Sikder, a former secretary of the government; Hasan Shaheed Ferdous, a retired senior district and sessions judge; Abdul Halim Chowdhury, a former managing director of Pubali Bank; Brigadier General (retired) Kazi Taufiqul Islam; Noor-E-Khoda Abdul Mobin, a chartered accountant; Mowla Mohammad, also a chartered accountant; Nashid Kamal, representative of the depositors; and Nurul Kabir, chairman of the finance department of North South University.

The HC has ordered the managing director to take over all the movable and immovable properties, cash in hand, shares, debentures, fixed deposit receipts, receivables, equipment, keys, documents, cars, and other objects provisional liquidator (now defunct).

The chairman of the ACC has been directed to deal with the criminal cases in connection with the transactions or businesses of PLFSL and must extend all-out cooperation to the board for its smooth functioning, the order said.

The court directed all the borrowers to contact the head office of PLFSL to have their loans rescheduled as per laws by making a down-payment within 30 days.

If they fail to start making payments, they will be under an obligation to appear before the court in person to explain their position, the order said.

The HC directed the board chairman to call, hold, and conduct the board's first meeting as per the convenience of all the members and the provisional liquidator Md Asaduzzaman Khan.

With the help of Khan, the chairman must temporarily appoint a company secretary from the present officers and ensure that a copy of the audit report prepared by ACNABIN, a chartered accountancy firm, has been disseminated to each director for their perusal and consideration before the first meeting.

On August 25, 2019, the HC bench appointed ACNABIN to conduct a special audit into all types of transactions and activities of PLFSL.

The managing director shall appoint the necessary workforce as quickly as possible, the order said.

The MD shall consider reappointing the previous officers and employees with good standing and who were not associated with PK Halder, his cohorts and other defaulter directors, it said.

Khan's lawyer Mejbahur Rahman told The Daily Star that the HC appointed the board and delivered the orders under the relevant provisions of the Companies Act, 1994.