Jubo Karmasangsthan Society (Jubok) owes a staggering Tk 2,147 crore to its clients, finds a government probe into alleged financial scam by the controversial NGO.
When Jubok's activities were suspended in 2006 on charges of illegal banking practices, it claimed to the Bangladesh Bank that it had collected only Tk 37.78 crore from 2.67 lakh clients till December 31, 2005.
A six-member committee that conducted the probe submitted its report to the finance ministry last week.
Formed in January last year, the committee recommends the government form a permanent commission to ensure that Jubok returns the money to its depositors.
Former BB governor Mohammad Farashuddin, who heads the probe body, told The Daily Star, "I believe getting them [Jubok] to return the money to the cheated clients will make a history for Bangladesh."
However, he added, Jubok operators have neither fled the country nor wasted the money. They have invested it in land, whose price has shot up over the years.
The probe committee through a public notice imposed a ban on the sale of the land, and as a result, the land has not changed hands, Farashuddin added.
After the notice was published, 2,67,330 people claimed money by producing documentary evidence against four Jubok concerns including Jubok Housing and Real Estate Development Ltd.
The probe report says the government needs to form a commission soon and for a long term--at least for three years--to get the money back to the depositors.
As per the committee's recommendations, the primary task of the proposed commission should be banning the sale of all movable and immovable property of Jubok and its affiliated organisations, and taking possession of the property.
The chairman of the commission may be given the status and benefits of a High Court judge or a government secretary and provided with office, manpower and financial support.
Monir Misir Chowdhury, a Jubok client from Kotbari in Comilla, told The Daily Star that investing in the NGO caused him a great deal of stress over the last few years.
He had used his father's pension and borrowed heavily from his relatives to put money into Jubok's businesses, he added.
However, Monir is now hopeful he would get back the money, as he believes the government is sincerely working to that end.
Jubok started its operation in 1994 by providing micro-credits to its members. Since its registration with the Joint Stock Companies in 1997, it has set up more than 20 business outfits.
By 2006, its tentacles spread to telecommunications, housing and real estate development, tourism, health, ceramics, seafood, IT, nursery, agro-biotech industry, and capital management.
Around that time, Hossain Al Masum, chairman of Jubok Housing & Real Estate Development Ltd, and Sabih Ul Alam, director of Jubok Ceramic Industries Ltd, joined the IFIC Bank as directors, purchasing a chunk of its shares.
The home ministry and the BB in separate investigations in 2006 found that Jubok has conned its clients out of crores of taka through different projects.
Jubok's shady activities came on the central bank's radar in early 2006. In May that year, the BB served a notice on the NGO, asking it to explain within seven days why its activities such as collecting deposits and borrowing from common people on interest should not be declared illegal.
In July the same year, it asked Jubok to return its entire savings, deposits and other credits to its members and depositors by December 31 that year. The deadline was later extended to March 2007.
Back then, Jubok director Syed Rashedul Huda Chowdhury issued a statement saying they would follow the BB directives, but that did not happen.
The 2006 BB investigation gathered that Jubok and its sister concern Jubo Karmasangsthan Udyog had been collecting deposits through deposit books and disbursing loans to its members and general people. But receiving money from people through deposit books is similar to collecting deposits by banks.
Besides, it found, Jubo Karmasangsthan Udyog had been receiving loans from people on high interest rate through agreements on non-judicial stamps.
As the NGO failed to return the money to its depositors, the BB referred the matter to the Anti-Corruption Commission (ACC) in February last year. But the ACC returned it, saying the central bank should take necessary steps in this regard.
Jubok Chairman Masud Al Hossain was arrested in June 2009 on charges of embezzlement. He, however, obtained bail after a few months.