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Hallmark Scandal: How Sonali Bank Lost 3550 Crore Taka?

The Hallmark Group is one of the biggest debt scandals in the banking history of Bangladesh. Between 2010 and 2012, the company embezzled BDT 2,731 crore from the then Ruposhi Bangla Hotel branch of the state-owned Sonali Bank. According to Sonali Bank’s audit and inspection report, Hallmark Group has used 42 different companies to withdraw the entire amount from the bank. Not only that, a number of other companies have embezzled a total of BDT 3,550 crore from this branch by adopting almost the same process. When the Bangladesh Anti-Corruption Commission was given the responsibility to investigate the scandal, the ACC filed a total of 38 cases against Hallmark Group and several officials and employees of Sonali Bank. Meanwhile, RAB has arrested Tanvir Mahmood, founder and managing director of Hallmark Group, and Jasmine Islam, chairman. But how exactly did Hallmark Group conduct such a big scam in the banking history of Bangladesh?

38 cases have been filed against Hallmark Group and several Sonali Bank officials by the ACC.
38 cases have been filed against Hallmark Group and several Sonali Bank officials by the ACC.

Hallmark Group founder Tanvir Mahmud owned a small grocery store at Taltola Bazar in the Agargaon area of ​​the capital. However, due to the pressure of poverty in the family, he later took a job in a readymade garment with a salary of only 3 thousand taka. As a consequence of his job in the garment industry, Tanvir Mahmood got an idea about the garment business and planned to set up his own garment business. As a result, he quit his job in Garments in 2006 and set up a Readymade Garments Factory with a loan from Sonali Bank Ruposhi Bangla Hotel Branch. In order to gradually grow Hallmark’s business, at one time about 40 Hallmark factories were established in Savar. Apart from this, Tanvir’s personal wealth stood at BDT 3,000 crore and he also became the owner of a luxurious house in Mirpur and 27 luxury cars.

The estimated value of Tanvir Mahmud's personal assets was around BDT 3,000 crore.
The estimated value of Tanvir Mahmud’s personal assets was around BDT 3,000 crore.

Tanvir used to visit Sonali Bank Ruposhi Bangla Hotel branch almost every time to open various types of LCs for material purchases and product delivery due to the garments business. As a result, Tanvir developed a good relationship with AKM Azizur Rahman, the then manager of Sonali Bank’s Ruposhi Bangla Hotel branch.

Meanwhile, after his success in the garment business, in 2008 Tanvir started building good relations with influential people of the country by giving them expensive things. According to a source in the Daily Jugantar, senior officials of Sonali Bank and various political leaders have received more than 30 luxury cars from Tanvir as a gift. Later, between 2010 and May 2012, Hallmark Group and five other companies embezzled around BDT 3,547 crore from Sonali Bank’s Rupshi Bangla Hotel branch on the basis of fake documents. According to The Daily Star, Hallmark Group alone takes a loan of BDT 2,686 crore, T&B Brothers BDT 610 crore, Paragon Group BDT 147 (146.60) crore, Nakshi BDT 66 crore 36 lakh and DN Sports BDT 33 crore 25 lakh and Khanjahan Ali embezzled about BDT 5 (4.96) crores.

It was reported that in between 2010 and 2012, Hallmark Group and five other companies stole around BDT 3,547 crore from Sonali Bank's Rupshi Bangla Hotel branch using fake documents.
It was reported that in between 2010 and 2012, Hallmark Group and five other companies stole around BDT 3,547 crore from Sonali Bank’s Rupshi Bangla Hotel branch using fake documents.

Hallmark embezzled the money using Financial Trade’s LC system. LC or Letter of Credit is basically a bank issue to the seller as Guaranteed Payment on behalf of the buyer in case of sale of goods in local bulk drawing starting from import-export trade. Under the supervision of AKM Azizur Rahman, Branch Manager, Sonali Bank Ruposhi Bangla Hotel Branch Hallmark Group exploits the system and opens Letters of Credit (LC) worth BDT 500 crore on March 28, 2012, by showing the documents of purchase of yarn from Anwar Spinning Mill, Max Spinning Mill, and Star Spinning Mill. Surprisingly, the three institutions to which these LCs were opened for payment were also customers of the branch of Sonali Bank. After receiving assurance from Hallmark Group to pay the full amount of LC on the same day, the bank bought the acceptance bills of the three companies on the same day and deposited the money in the accounts of the companies. Acceptance Bill or Bankers Acceptance is basically a guarantee of any future payment by a bank. This is where the Hallmark scandal begins.

A few days after the incident, the three institutions transferred the entire deposit back to Hallmark’s account. According to the investigation, the money was later transferred from Hallmark’s account to another current account called “Century International“. Basically, the Hallmark Group was able to withdraw the entire amount from there. The ACC investigation revealed that Anwar Spinning Mills, Max Spinning Mills, Star Spinning Mills, and even Century International were non-existent. The ACC report mentions these companies as anonymous companies. Even the documents deposited in the bank as proof of yarn purchase were forged. According to Sonali Bank’s own audit and inspection report, Hallmark has used 42 institutions to withdraw money from the bank. Initially, these were identified as fake. However, the inspection team of Bangladesh Bank got information about the use of 84 such institutions. However, according to the report of Sonali Bank, about twenty of these institutions are definitely fake.

Sonali Bank reported that of all the institutions Hallmark used to withdraw money, about 20 of them were definitely fake.
Sonali Bank reported that of all the institutions Hallmark used to withdraw money, about 20 of them were definitely fake.

In August 2012, Bangladesh Bank handed over the case to the Anti-Corruption Commission to investigate the embezzlement of Hallmark from Sonali Bank. This information came out from the investigation of the ACC. According to a report in Prothom Alo published on September 28, 2012, the Sonali Bank authorities had sent a letter to Hallmark to return half of the money within 15 days. However, without repaying any money within the stipulated time, the company said it would take them 30 years to repay the bank dues. According to a report by Prothom Alo, in October 2012, the 6-member investigative team of the Anti-Corruption Commission (ACC) filed 11 cases with the Ramna Model Police Station against 7 members of the Hallmark Group including Tanvir Mahmud and 20 officials of Sonali Bank along with the managing director Humayun Kabir a total of 27 people. Following this, RAB arrested the managing director of Hallmark Group Tanvir Mahmud. Mir Zainul Abedin Shibli, head of the Anti-Corruption Commission’s investigation team, said: “In these 11 cases, the Hallmark Group has embezzled more than BDT 1,568.49 crore 34 thousand 877 directly from Sonali Bank.”

Bangladesh Bank handed over the embezzlement case of Hallmark to the ACC in August 2012.
Bangladesh Bank handed over the embezzlement case of Hallmark to the ACC in August 2012.

According to another report by Prothom Alo, in January 2013, the Anti-Corruption Commission filed 26 new cases against 35 officials of Sonali Bank and five other companies for embezzling more than BDT350 crore. In October of the same year, the ACC filed a charge sheet against 26 people, including Hallmark Group managing director Tanvir Mahmud, chairman Jasmine Islam, and the group’s general manager Tushar Ahmed. After the investigation, the ACC submitted charge sheets in 11 cases in 2014, and on February 17, 2015, charges were framed in two cases. Besides, charges were framed in the remaining nine cases on March 27 of that year for money laundering and collusion. According to a source in the daily Jugantar, the then MD Humayun Kabir took at least 10% commission from Hallmark Group in return for the loan. Subsequently, in November 2016, ACC Deputy Assistant Director Joynal Abedin filed a case with the Motijheel Police Station against 16 people, including Hallmark Chairman Jasmine Islam, for embezzling more than BDT 85 crore. On the same day, Jasmine Islam was arrested from the Bangshal area of ​​the capital.

On October 2013, the ACC filed a charge sheet against Hallmark Group's Tanvir Mahmud (Managing Director), Jasmine Islam (Chairman), Tushar Ahmed (General Manager), and 23 others.
On October 2013, the ACC filed a charge sheet against Hallmark Group’s Tanvir Mahmud (Managing Director), Jasmine Islam (Chairman), Tushar Ahmed (General Manager), and 23 others.

According to the Daily Jugantar, the ACC has so far filed 37 cases against Hallmark Group chairman Jasmine Islam, MD Tanvir Mahmood, and former Sonali Bank MD Humayun Kabir in connection with the Hallmark Group loan scandal. Besides, 20 other officials of the bank and several relatives of Tanvir were also accused in these cases. In addition to the loan scandal, a report in Prothom Alo said Hallmark was also accused of occupying 10 acres of government-owned land, including privately owned land. Hallmark Group has forcibly occupied more than 100 plots of an organization called Janata Housing in Hemayetpur, Savar. The owners of the plots have so far filed at least 20 cases against Hallmark Group Managing Director Tanvir Mahmud, other officials and workers at the Savar Police Station, including the Dhaka Judicial Court, and 50 more general diaries. In addition, Hallmark Group also occupied half of the land in a housing project called Arunachal Housing Cooperative Society Limited. When construction of the boundary wall began on the 3.81-acre land occupied by the Hallmark Group Association in November 2011, the plot owners of the housing project filed a case in the Savar Magistrate’s Court. These cases are currently pending in court.

In November 2011, Hallmark Group unlawfully occupied 3.81 acres of land in Savar which led the plot owners to file 20 cases against them.
In November 2011, Hallmark Group unlawfully occupied 3.81 acres of land in Savar which led the plot owners to file 20 cases against them

According to a source in Banik Barta, the verdict in the first case of the Sonali Bank and Hallmark scandal on May 24, 2016, was announced. Abdullah Al Mamun, former assistant manager of Sonali Bank, director of Paragon Knit Composite Limited, and Saiful Islam, managing director of Paragon were sentenced to life imprisonment and fined BDT 2 crore each. 

Moreover, in a press conference in 2019, the country’s finance minister, Mr. AHM Mustafa Kamal, said that Hallmark wants to resume its activities. In this case, the imprisoned chairman and managing director of the company will have to be released, in view of which the company has sent a proposal to the Honorable Finance Minister that it will repay 2% of the total debt. However, according to a 2020 report by Shomoy TV, seven years have passed since the Hallmark scandal, and not a penny of the three and a half thousand taka taken from the Sonali has been paid by Hallmark Fashion Limited Bank. Even after granting bail to Hallmark chairman Jasmine Islam on the condition of depositing BDT 100 crore every month, the company did not pay any money. When Sonali Bank was compelled to recall 3834 acres of land in Hallmark, the court was reminded that in November 2020, the Dhaka Finance Court ruled in favor of Sonali Bank and the said land is now under the bank’s control.

Hallmark Group proposed to the Honorable Finance Minister that the company will settle its debt in return for continuing its operations.

Originally with the help of the Government of Bangladesh and Honorable Finance Minister AHM Mostafa Kamal and the Judiciary, Sonali Bank was able to recover some of the money embezzled through the Hallmark Group’s assets. Moreover, at a press conference held on the occasion of Sonali Bank’s 50th anniversary in April 2022, the bank’s managing director (MD) Ataur Rahman Pradhan said, “All the assets of Hallmark have been brought under the control of Sonali Bank through the court verdict. Now they are planning to recover money by selling assets and creating economic zones in specific areas of Hallmark.” He added that the issue of Hallmark will be settled this year or by 2023. Subsequently, according to a source in Prothom Alo, in May 2022, Sonali Bank sentenced nine officials, including the then managing director of Ruposhi Bangla Hotel Branch, to 17 years in prison for embezzling Rs 2.75 million from Sonali Bank in a Hallmark loan scandal.

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