June 21, 2024, 4:06 pm

Special Correspondent

2023-01-24 03:29:16 BdST

Ghost cos launder money, sell imported raw materials in local market

The National Board of Revenue (NBR) has identified 53 companies which are listed with the concerned bodies of the government but non-existent.

The companies are importing the raw materials of export-oriented products taking tariff benefits and later selling those in the open market.

An initial investigation shows that the organisatiosns have laundered money through banking channel.

NBR's investigation also revealed that 71 other companies are involved in financial irregularities and money laundering by importing raw materials taking same benefit from the government.

The accounts of these 124 identified organisations have been seized from July to December last year.

Besides, the trade licenses have been suspended and ban was slapped on import-export of these companies, most of those are affiliated with the ready-made garment and its allied industries.

A detailed investigation is underway to identify the amount of money they have laundered, NBR sources said.

A senior official of NBR and member of the task force on the condition of anonymity said that each company brought products worth nearly Tk 5 crore to Tk 25 crore in multiple consignments and sold them in the open market. On the other hand, each of the company has laundered Tk8 crores to Tk15 crores or more. According to this, the 124 companies brought products of worth Tk 1,000 crore and sold them illegally in the open market and smuggled another Tk 1,500 crore.

Mentioning that it was found in the initial investigation, he said the amount may increase or decrease as final calculation is going on.

About  impact on the domestic industry due to bringing raw materials using tariff advantage and selling them in the open market, the former chairman of NBR Mosharraf Hossain Bhuiyan said that production costs of domestic industry using native materials is high as they are paying all types of revenue.

On the other hand, the cost is lower for using foreign product as there is no need to pay duty on the import of goods. Customers are buying more of these products due to the availability of products at low prices. On the other hand, even if the domestic product is sold with minimum profit, it cannot cope with it. As a result, domestic industries are suffering losses.

A 17-member task force consisting of NBR officials examined all five years (2017-2021) import-export data of 124 establishments. In particular, the investigation is focusing on how much raw material has been imported, how much has been produced, what is the amount of export, how much money sent in favour of any country through bank LC or letter of credit.

According to the report of the task force, 71 companies, which are in production, have committed financial irregularities by giving false information in the import and export of raw materials. They have imported more amount of raw material than it required and then sold it in the open market. On the other hand, it has produced less than what supposed to be exported and has exported nominal amount of products. Meanwhile, non-existent companies also bought huge amount of raw materials from outside but exported a few goods.

Apart from ready-made garments and allied industries, electrical and plastic sectors are also involved in these irregularities. They imported art card, duplex board, medium paper, liner paper, polypropylene (PP), BAPP and adhesive tape, plastic granules, hangers, polythene, yarn, cloth, wire and various electrical equipment. But those raw materials were not taken to the factory but they sold those to various shops in Nayabazar, Bangshal, Bakshibazar, Hatem Tower, Dholaikhal, and Tongi in the capital.

According to the NBR report, the addresses of the companies were mentioned as Belukuchi Knit Wear at Mirpur 2, Covers and Cover Industries at Adabar, Impex Packaging Limited at Shyampur Kadamtali, MM Washing Plant Limited at Tongi, Parsa Limited on Airport Road in Banani, Rain Fashion Limited at GOH Block in Banani, Weld Dresses Ltd at Tongi, Markav Designers Ltd Mirpur’s Pallabi, Kotwali, and Manila Polymer Industry Ltd in Dhaka’s Kotwali area. But the existences of 53 companies were not at the address. In fact, shops, residential buildings, shopping malls, student hostels, and schools were found in the address.

According to the report, the 124 companies are listed as 100% export oriented with Bangladesh Bank, NBR and various government institutions. Those who have been named as Chairman, Managing Director or Director of the manufacturing companies have claimed that they know nothing about it. They claim that they have not signed any document related to import of raw materials and export of products. However, NBR sources said that these persons have been kept under the surveillance of law and order forces.

Recently, the officials of Dhaka Customs Bond Commissionerate seized a covered van with paper which was imported abusing bond facility or duty free facility while taking it for sale in Babubazar in the capital. These papers were cleared from the port by a company called AB Packaging. The market value of the seized goods is about Tk 14 lakhs. The price went up to Tk26 lakh if duty and tax are paid. The company has sold product worth Tk12 crores in the open market in various consignments in a year.

The government has given special facilities called 'bond facilities' for importing raw materials to help manufacturing of products of 100% export-oriented companies. The ghost organisations enjoying this benefit do not have to pay duty on import of raw materials. In order to get this benefit, the importing company has to comply with certain conditions. One of the conditions is that all the raw materials imported taking duty free facilities must be used in production. All the manufactured goods have to be exported and even a small amount of raw materials cannot be sold in the open market. Violation of these conditions will result in cancellation of bond facility and suspension of trade license as penalty. If necessary, factory land and machinery will be seized. There is legal scope to file a criminal case against the importer. As a punishment, the bank accounts of the importing company and those associated with it can be seized.

According to the report, the companies imported products of lower price and less quantity compared to which mentioned in  LCs. In this illegal business, unethical benefits have been given to some unscrupulous persons of banks, ports and NBR.

Former Commissioner of Dhaka Customs Bond Commissionerate and NBR member Dr Shahidul Islam said that NBR has increased surveillance to identify bond facility abusers. However, it takes time to bring them under the punishment due to legal problems.

Preventive, regular and special audits are conducted to detect bond corruption. In these audits, the final investigation is done after the collection of preliminary evidence. Months to years pass in gathering evidence. After that, the concerned persons of the accused organisations were summoned for the hearing. Then the case was filed in the Appellate Tribunal of NBR and years passed in settling the case. After the judgment, accused party has the option to move to the High Court. The number of pending cases has crossed 20,000.

Former NBR chairman Abdul Majid said bond corruption is not stopping for lack of exemplary punishment of those involved. He advised NBR to be stricter with amending the law in this regard.

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