Trust Bank yesterday said there is no scope for the bank chairman to launder its money, in response to allegations made by former energy adviser Mahmudur Rahman against Anti-Corruption Commission Chairman Lt Gen (retd) Hasan Mashhud Chowdhury.
Mashhud had been chairman of the bank in his capacity as chief of army staff.
In a press release to The Daily Star, Trust Bank said there has been no case of misappropriation or laundering of the bank's money by any chairman or director ever since the inception of the bank.
The release reads: Trust Bank's attention has been drawn to a news item appearing in a section of print and electronic news media to the effect that Mr Mahmudur Rahman, former Executive Chairman of Board of Investment, has accused Lieutenant General Hasan Mashhud Chowdhury (Retd), former Chairman of Trust Bank Limited, of laundering money belonging to the Bank.
Some of the newspapers and TV channels also reported that Mr Mahmudur Rahman alleged that Lieutenant General Hasan Mashhud Chowdhury (Retd) misappropriated Bank's money in the year 2002 while he was Chairman of the Bank.
In view of the news item and accusations involving Trust Bank Limited, the Bank finds it necessary to clarify the matter in order to remove the confusion that might have caused to the depositors and valued customers of the Bank as well as members of public.
Trust Bank makes it unambiguously clear that no case of misappropriation/laundering of Bank's money, by any Chairman or Director, has ever occurred since the inception of the Bank.
The Bank also makes it clear in unequivocal term that in accordance with the demarcation of power between the Board of Directors and the Management as provided by Bangladesh Bank, in its BRPD Circular No 9 dated 17 Sep 1996 (later replaced by BRPD Circular No 16 dated 24 July 2003), Directors of a bank company cannot take part in the operation activity of the Bank, their role being limited to framing of policy and approving business strategy and proposal.
Hence, the question of misappropriation/laundering of Bank's money by the Chairman does not arise at all.
The factual position is that Trust Bank suffered a loss of Tk 23.07 crore in its foreign exchange dealing operation during January 2002 to July 2003. Launching of foreign exchange dealing operation was approved by the then Board of Directors in September 2001.
Lieutenant General Hasan Mashhud Chowdhury (Retd) became Chairman of the Bank in July 2002. The operation of foreign exchange dealing commenced in January 2002 and had incurred loss right from the beginning of the said operation.
However, the then Managing Director of the Bank did not disclose the loss to the Board of Directors and the Bank's annual accounts of 2002 were prepared without showing the loss. The loss-making venture continued till July 2003 but was kept hidden by the then Managing Director from the Board until the occurring of loss was detected in early August 2003 after Bangladesh Bank conducted an inspection of the Bank's foreign exchange operation and asked for explanation from the Bank's Management regarding un-reconciled balances of Bank's overseas foreign currency accounts (usually called NOSTRO accounts).
Thus, the Board of Directors came to know about the huge loss which accounted to Tk 23.07 crore.
The Board then immediately suspended the then Managing Director and terminated his service contract with necessary approval of the Bangladesh Bank. The Management also took disciplinary action against the former employees.
Thereafter, as per decision of the Board of Directors, headed by Lieutenant General Hasan Mashhud Chowdhury (Retd), the Management filed a criminal case in the court of Chief Metropolitan Magistrate, Dhaka, against the former Managing Director Mr. Zahid Hossain Chowdhury and two other former officers of the Bank for concealment of the facts and for breach of trust.
The Bank also filed money suit in the Court of 1st Joint District Judge, Dhaka for recovery of the Bank's money. The criminal case is pending in the Appellate Division, and the other case is pending in the trial court.
The Bank recognises the loss as a purely transactional loss like any other business loss and the Bank's annual accounts of 2002 were rectified later on.
That from the above facts, supported by documents and court records, it is clear that there was no case of money laundering or misappropriation of Bank's money.