Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
The scam-hit People's Leasing and Financial Services Ltd (PLFSL) has sought financial support from the government to help the non-bank financial institution run operations at full capacity.
Hasan Shaheed Ferdous, the court-appointed chairman of the institution, also sought government intervention in addressing problems, including acute capital crunch.
To this end, he sent a letter to the Financial Institutions Division under the Ministry of Finance on January 18.
When contacted, he said, "A cash infusion is the lifeblood required to revive the fortunes of PLSFL. We need around Tk 5.0 billion in this connection."
An injection of capital would enable the firm to restore its position of strength and stability with due diligence and astute business acumen, he told the FE.
"We have already started the operations of the PLFSL. We are recovering defaulted loans and conducting lending activities."
"We have achieved remarkable success in recovering an estimated Tk 1.50 billion from delinquent borrowers," he claimed.
According to the PLFSL, the NBFI is recovering defaulted loans of Tk 30 million on average per month.
It also disbursed around Tk 500 million in accordance with the court's directive.
The company has judiciously invested more than Tk 500 million in fixed deposit receipts (FDR) and it allocated approximately 400 million for lending.
"Given the prevailing circumstances, government-sponsored capital injection represents a sturdy foundation upon which we can stand and attract private capital investment," cites the letter.
"This collaborative effort is poised to bolster the company's net worth and enable us to realise our mission of restoring PLSFL to its rightful position of strength and stability."
The NBFI fell into a dire strait after Prashanta Kumar (PK) Halder, former managing director of Reliance Finance and NRB Global Bank, swindled over Tk 35 billion from four NBFIs, including the PLFSL, between 2014 and 2015.
Some former directors of the PLFSL were also involved. It was disclosed in 2019. PK Halder was arrested in India's West Bengal on May 14 last year.
In 2019, the Bangladesh Bank initiated liquidation proceedings against the PLSFL in the Company Bench of the Supreme Court, culminating in the appointment of a provisional liquidator entrusted with overseeing the company's affairs.
However, rather than pursuing complete liquidation, the court opted for a restructuring strategy and appointed a dedicated board of directors to manage its operations.
The court stipulated that government aid was the primary and preferred avenue for raising the necessary capital to revitalise the company.
Earlier, the PLFSL sought funds from the central bank to rejuvenate and fortify its operations. But the BB rejected the plea, said a PLFS source.
Financial Institutions Division secretary Sheikh Mohammad Salim Ullah could not be contacted for comment despite several attempts over phone.
The leasing firm has been badly affected by its defaulted loans, with classified amounts reaching around 99 per cent of the total outstanding loans, according to an audited report of the NBFI for 2021.
The company's share trading remained suspended since 14 July 2019 as its shareholders rushed to dump their shares following the news of liquidation.
The last trading price of the company was Tk 3.0 each. The company failed to pay a dividend in 2014, when it paid a 10-per cent stock dividend.
The company's paid-up capital is Tk 2.85 billion, authorised capital Tk 5.0 billion and the total number of securities 285.44 million.