People's Leasing expects Tk200cr foreign investment
The High Court-appointed board of People's Leasing and Financial Services Limited, a scam-hit non-bank financial institution (NBFI), expects an investment from Blue Ray, a Dubai-based company eager to inject equity.
"We have received assurance of around Tk200 crore in financial assistance from Blue Ray, and we are hopeful to secure the funds very soon," said Hasan Shaheed Ferdous, chairman of the board, during a press conference at its office on Thursday.
He added, "In exchange for the investment, the foreign firm will receive shares of the company, but the process is yet to be finalised."
The new board arranged the press conference to share the overall developments of the embattled NBFI, with Managing Director Md Sagir Hossain Khan and Company Secretary Md Armia Fakir present.
Hasan Shaheed Ferdous said, "People's Leasing is now stable; there is no possibility of falling from here. We are gradually turning things around. In addition to resolving defaulted loans, we have also resumed fresh lending, and depositors' money is being refunded."
Regarding the new investment, he said, "We met with Blue Ray, and it has offered financial assistance or capital participation. Initially, there was an understanding to get a participation of Tk200 crore."
He said, after receiving this fund, investments will be made in better ways. Specifically, investments will be directed towards fintech or emerging businesses, and a portion will be invested in fixed deposit receipts (FDRs) in banks, generating income.
"The trading of the company's shares has been suspended. We have already applied for the withdrawal of the suspension, and in response, they have provided some instructions," he added.
People's Leasing starts logging profit
Hasan Shaheed Ferdous said, "We initiated the process of restructuring People's Leasing from the very beginning. We have now begun to generate profits. If this trend continues, things will improve in the future."
He said, "At the beginning of 2022, we commenced the process of reorganising People's Leasing after receiving Tk32 crore from the liquidator appointed by the Bangladesh Bank. Subsequently, Tk150 crore was taken from banks, and the reconstruction efforts commenced with this capital."
The board chairman also said some funds have been invested in FDRs in banks, and some funds are in the company's bank accounts.
"Each month, an average of Tk3 crore is coming back from borrowers, and depositors are being repaid. There is no longer a fear of not getting your money back from People's Leasing. We are actively refunding customers, and we have also started providing home loans and car loans," he continued.
Tk101cr recovered, Tk37cr returned to depositors
According to data from People's Leasing, it has returned Tk37.53 crore to 2,053 depositors till 27 December 2023 and recovered Tk101 crore from borrowers.
People's Leasing Company Secretary Md Armia Fakir said other depositors will be refunded step by step. Depositors' claims to the NBFI are Tk1,107.74 crore, he added.
According to the financial report for 2021, People's Leasing has disbursed Tk1,211 crore, of which 98.87%, or Tk1,198 crore, are non-performing loans.
In 2021, its loss stood at Tk399 crore, and the accumulated loss amounted to Tk3,744 crore.
The NBFI – listed on the bourse in 2012 – has plunged into severe trouble as Prashanta Kumar Halder, commonly known as PK Halder, swindled around Tk3,500 crore from several financial institutions, including People's Leasing, according to company officials.
The High Court-appointed board has proposed several plans to revive the NBFI, including fresh capital injection through partnership, loan recovery, and proper utilisation of its assets.
In July 2019, Dhaka and Chattogram bourses suspended the trading of People's Leasing shares for the interest of investors, according to the stock exchanges.
In October this year, People's Leasing conducted its annual general meeting (AGM) after six years, following a directive from the High Court.
The AGM was held for 2021, and the previous year's AGM has not been held yet.
People's Leasing, which commenced operations in 1996, has reportedly been facing a wide range of financial scams.
In response, the Bangladesh Bank appointed an observer at the company in 2015.
Moreover, the central bank removed five directors from the NBFI's board in 2015 due to their alleged involvement in the embezzlement of Tk358 crore.
Subsequently, the company's liquidation process began in April 2019 after its board informed the central bank about its inability to pay its depositors back after maturity.
However, in July 2021, the High Court threw a lifeline to the struggling NBFI by reconstituting its board of directors, thus saving the company from being liquidated.
In December 2021, the company's total deposits stood at Tk2,661 crore, and total outstanding loans amounted to Tk1,211 crore.