The Financial Express

Fund transfer: Insight into P.K. Halder's way

Fund transfer: Insight into P.K. Halder's way

Prasanta Kumar Halder, known as P.K. Halder, reportedly, has transferred a part of the money he had siphoned off from several banks and financial institutions to India, Canada and Singapore.

It is really difficult to say specifically how much money Halder has taken out of the country. But a report submitted by the Bangladesh Financial Intelligence Unit (BFIU) of the central bank to the High Court estimates the amount at around Tk 13 billion. The swindler, according to media reports, embezzled more than Tk 30 billion with the help of many people, including bankers, businessmen and others. The BFIU has so far identified 83 people who allegedly helped Halder in embezzling the funds from several banks and financial institutions and frozen their bank accounts.

The issue here is not how Halder embezzled the funds, but how he has transferred the same to several countries. His selection of Canada has been an obvious one. Once money, tainted or otherwise, goes there from outside it is more or less safe. If the transferor can manage resident status or citizenship, it would be hard to dislodge him/her from the soil of that country and recover the illegal money he or she has transferred.

That is why many affluent people have either settled or built a second home in that country. It is, however, not to say that all the people who have settled in Canada or any other country own ill-gotten wealth. Thousands of Bangladesh nationals have settled permanently abroad for various reasons and they love their country of origin as much as others do. But among them are some who are guilty of transferring a large sum they had accumulated illegally in their home country.

Again others stay here but have transferred funds abroad illegally and their family members are managing the same and enjoying a comfortable life. They too, from time to time, join their families abroad and spend some time there. A few of them have also acquired citizenship of other countries, but they tend to keep it secret.

Thus, one might try to relate a recent statement by Foreign Minister Dr M.A. Momen on the developments surrounding P.K. Halder. Dr Momen had said that not only politicians or businessmen, some government officials have also transferred funds illegally to other countries.

All these developments substantiate several reports on capital flight, prepared by the Global Financial Integrity (GIF). In the first report, the GIF estimated the flight of capital from Bangladesh during a decade, starting from 2003, at US$9.6 billion. The second report was far more devastating. The GIF estimated the illegal outflow of fund from Bangladesh in 2014 alone at US$9.1 billion.

It is feared that a large sum of illegally-gained money went out of the country during the military-backed caretaker government's rule between 2007-08. Many had transferred such wealth fearing tough action by the authorities. The 2013-14 period turned out to be an uncertain one due to extreme political rivalries. Many, during that period, also transferred their undisclosed money to safe zones beyond the country's border.

It is widely believed that the flight of capital from the country is always on. The size of the fund being sent abroad might also have now grown bigger than before with the government spending, in terms of development and revenue budgets, rising phenomenally in recent years. With corruption remaining systemic, the accumulation of illegal money in the hands of influential people and their cohorts should be a very natural outcome.

Though the Interpol at the request of Bangladesh has issued 'red alert', catching P.K. Halder is unlikely to be easy. Since some of his accomplices have been arrested, the intelligence agencies might get an idea about how a huge amount of money was transferred abroad by Halder.

The GIF and other international agencies have listed the mis-invoicing in trade transactions as the prime means used in transferring illegal funds from one country to another. The act of over-invoicing indulged in at the time of imports is thought to be one of the major ways to do so. The fund thus transferred might belong to the importer concerned or someone else. Under-invoicing in the case of exports remains yet another way of siphoning off funds abroad. With underhand deals struck with buyers in place, holding back a portion of the export proceeds in foreign accounts is very much possible.

Also, there are easier ways. Of course, illegal ones. Hundi is one such way. Funds worth billions are reportedly transferred from Bangladesh to other countries, including the UAE, Malaysia, Canada, Singapore and Switzerland.

It is really difficult to plug all the holes that are used to transfer illegal money. The extent of fund flow can be reduced if effective measures were taken to rein in corrupt practices. That, however, will be a big ask when the ground is fertile for indulging in corruption. The corruption paradigm hardly changes notwithstanding the presence of the Anti-corruption Commission (ACC).


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