Bangladesh Bank clears active Beximco companies to open LCs under conditions

Bangladesh Bank has authorised active and revenue-generating entities within the Beximco Group to open Letters of Credit (LCs) under strict conditions, despite the conglomerate’s entanglement in a series of loan default scandals and corruption investigations.

Governor Ahsan H Mansur approved the measure during a high-level meeting with executives from 20 banks and seven non-bank financial institutions, according to multiple officials who attended the session.

The move is intended to ensure the survival of the group’s relatively stable units while facilitating loan recovery efforts.

The central bank has mandated a 100 percent margin requirement and individual approval from Bangladesh Bank for each LC opened by Beximco companies.

“The central bank has no intention of shutting down Beximco’s operational companies,” said Syed Mizanur Rahman, managing director and CEO of AB Bank.

“Those with the capacity to continue business and generate revenue have been asked to open LCs, even if others in the group are in default.”

The decision comes in the wake of widespread revelations of financial irregularities involving the Beximco Group following the fall of the Awami League government in August 2024.

Salman F Rahman, the former prime minister’s advisor on private industry and investment, and his brother Sohail F Rahman held key control over Beximco’s corporate boards.

Since the regime change, Salman has been arrested, and multiple government agencies have launched investigations into alleged embezzlement and money laundering tied to the group.

The Criminal Investigation Department (CID) has filed 17 cases accusing Salman and 27 others of laundering nearly Tk 10 billion under the guise of export shipments.

The Anti-Corruption Commission (ACC) is also probing separate charges, while the Bangladesh Financial Intelligence Unit (BFIU) froze the bank accounts of Salman, his son Ahmed Shayan F Rahman, and daughter-in-law Shazreh Rahman in August last year.

In addition, the ACC has lodged a case against Salman, Shayan, and their nephew Ahmed Shahriar Rahman, alleging they siphoned off funds to London through shell companies and fraudulent loan activities.

The National Board of Revenue (NBR) is also investigating tax-related violations linked to the family and Beximco associates.

With banks halting fresh lending to most of the group’s companies, several of Beximco’s business arms have been paralysed, triggering job losses and prompting the court to appoint an administrator to oversee group operations.

Against this backdrop, Bangladesh Bank convened Monday’s meeting to discuss strategies for recovering defaulted loans while keeping solvent units operational.

Mazibur Rahman, managing director of Janata Bank, said: “Discussions centred on the recovery of outstanding loans from Beximco. The governor directed us to allow viable companies within the group to open LCs under a special arrangement.”

Under normal circumstances, default by any part of a conglomerate would result in a blanket suspension of new loan disbursements and LC issuance across all affiliated entities. The central bank’s decision signals a nuanced approach aimed at balancing accountability with financial stability.