Vol. 5 Num 474 Sun. September 25, 2005  
Front Page

Fraud grips security printing press
It owns no hot stamping machine, but pays for it every year

The state-run Security Printing Corporation (Bangladesh) Ltd (SPCBL) has been trapped in fraudulent practices in the supply of holographic cigarette stamps, the single largest source of government revenue earning.

Since the introduction of holographic foils in cigarette stamps in 2000-01, government's revenue from tobacco sector rose to Tk 3,300 crore a year from Tk 700 crore. But instead of procuring two hot stamping machines required for the job, the SPCBL is spending crores of taka on these machines every year to get the job done by private parties.

Officials said the SPCBL pays the machines' costs each time to private parties who supply the holographic foils. Each year the tender winners bring brand new hot stamping machines on 'import and re-export' basis.

But on receipt of the work order in the latest case, Ahead Optoelectronics of Taiwan and its local agent Hologram Bangladesh Ltd (HBL) virtually held the SPCBL hostage by not importing new machines as required by the tender. They rather forced the SPCBL to allow them to reuse the old machines in February this year when any supply crises of holographic foils would have caused a huge revenue loss to the National Board of Revenue (NBR).

Instead of importing and installing new machines on the SPCBL compound in Gazipur, Ahead and HBL made a cunning move and spot-purchased two old hot stamping machines from previous year's successful bidder Holographic Systems International GmBH (HSIG) of Germany.

In January this year, General Manager of the SPCBL Md Abdul Awal wrote to Ahead Managing Director Eric Liao "In the tender schedule/work order it's clearly mentioned that the machine must be a newly imported one but your proposition is a clear violation of the tender schedule and work order."

But SPCBL Managing Director (MD) Khurshid-ul-Alam eventually accepted the old machines on February 10.

SPCBL officials argued that non-acceptance by the MD at that point of time would have resulted in the NBR's revenue loss of crores of taka due to the SPCBL's failure to supply holographic foils in time.

While the SPCBL does not own these machines on the logic that reuse of the machines for the second year could pose threats to highly secured holographic foils, it allowed private firms to get away with the violation of rules.

When contacted, Awal said he is not authorised to tell the press anything about it.

Talking to this correspondent recently, Bangladesh Bank Executive Director Khurshid-ul-Alam, also ex-officio MD of the SPCBL, admitted the allegations but said, "I have my limitations. The final approval came from the board (Board of Directors)."

The central bank governor chairs the SPCBL's Board of Directors comprising representatives from the finance and home ministries, Internal Resources Division (IRD) and Postal Department.

On alleged violation of tender rules and holding the SPCBL hostage to their whims, MD of HBL Amin Helaly first claimed that Ahead had bought the hot stamping machines from Artfoil Company of UK.

But when this correspondent showed him documentary evidence of his paying money to the HSIG in Dhaka for retaining the previous bidder's used machines, Helaly said, "Listen, it's a matter of $2,400 only. What we could do, we could spend $2,400 as freight charge for shipping these machines out of the country first and then re-import the same. SPCBL required us to go for fresh import of machines, instead, we procured those locally."

Helaly however wondered that public money is wasted in paying the machines' costs to private parties. "SPCBL is such a fool that each year it pays for the (hot stamping) machines but it never owns one."