One of Bangladesh's largest and most diversified conglomerates has been accused of trade-based money laundering (TBML) at least US$135 million by using fraudulent letters of credit (L/Cs) to obtain loans.

Beximco Group laundered the money in a scheme that involved exporting goods through 18 companies without repatriating the value of the goods exported, according to Bangladesh's Criminal Investigation Department (CID).

Collateral for loans

Reports suggest that Beximco used L/Cs to serve as collateral for a loans. Different companies in the group would first apply for an L/C to be issued in their favour, and then approach a bank to request a loan or advance based on the value of the L/C.

The group would first open an L/C for exporting goods and then take out a loan locally against 80 per cent of its value, according to inspector Mohammed Moniruzzaman of the CID's financial crime unit. He says Beximco received no export proceeds from such L/C transactions, and the loans remain unpaid.

Around US$23 million was laundered through Apollo Apparels; US$24 million through Bextex Garments; US$25 million through International Knitwear and Apparels and US$24 million through Esses Fashions, according to the CID database.

Political connections

Beximco's co-founder and vice-chairman is Salman F Rahman, a prominent Bangladeshi businessman and politician.

Rahman had a close relationship with Sheikh Hasina, the recently deposed long-serving prime minister of Bangladesh. He was one of her key advisors, particularly on matters related to industry, trade, and investment.

Since the ousting of Sheikh Hasina, Rahman has been implicated in several crimes while the Bangladesh Financial Intelligence Unit of Bangladesh Bank has frozen his bank accounts.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.