Court orders ACC to dispose $25m laundering inquiry plea against ex-EBL chair Showkat within 30 days

The High Court has directed the Anti-Corruption Commission (ACC) to dispose of an application seeking an inquiry into allegations of laundering $25 million to the United Kingdom by Showkat Ali Chowdhury, former chairman of Eastern Bank PLC (EBL) and a controversial ship-breaking businessman, within 30 days.

At the same time, the court issued a rule asking why legal action should not be taken against the Bangladesh Financial Intelligence Unit (BFIU) for its failure to bring back the total laundered $25 million from the UK.

The HC bench of Justice Fahmida Quader and Justice Md Hamidur Rahman passed the order following a hearing on a writ petition today (25 August). Senior advocate Syed Mamun Mahmud, Advocate Mohammad Ali, and Barrister HM Shanjid Siddiqi represented the petitioner in court.

Earlier, Supreme Court lawyer Advocate AHM Rezwanul Sayed filed the writ petition seeking directions for the ACC to settle the application submitted last year regarding the money laundering allegations against Showkat Ali.

As respondents, the petition named the ACC and its chairman, the head of BFIU, the National Revenue Board (NBR), and the governor of Bangladesh Bank.

How UK found the money

According to the petition, while investigating the laundered assets of former land minister Saifuzzaman Chowdhury, the UK’s National Crime Agency (NCA) discovered $25 million held in Showkat Ali’s name in the UK.

No satisfactory explanation regarding the legal source of the funds was provided to the NCA.

During the ongoing investigation, steps were also taken to transfer the funds to Mashreq Bank and Emirates NBD in Dubai.

The UK investigators temporarily suspended the suspicious transaction and officially informed the BFIU, clearly stating that the transaction could no longer be withheld unless a freezing order or a Mutual Legal Assistance (MLA) request arrived from Bangladesh within four weeks.

However, the petition claimed that because the BFIU failed to take legal action within the stipulated timeframe, the funds were transferred from the UK to the United Arab Emirates, causing the country to permanently lose the opportunity to repatriate the money.

No inquiry, only negligence

The petition further noted that the $25 million was subsequently disclosed in tax returns as undisclosed offshore assets, and approximately Tk136 crore was paid in income tax to the Large Taxpayers Unit (LTU) of the NBR from that $25 million, which was partially repatriated. 

Additionally, a fine of Tk306.87 crore was imposed revenue board, which has not been realised to date.

The petitioner argued that merely imposing taxes or fines does not discharge liability for a serious criminal offense like money laundering.

Neither the ACC nor any other agency conducted an inquiry into the source of the funds or how they were laundered abroad.

As the assets were disclosed to the revenue board’s LTU only after the NCA’s information reached the BFIU, the petitioner contended that the disclosure was made with dishonest intent to evade criminal liability.

Prior to filing the writ itself, a legal notice had been sent to the relevant authorities on 11 July, followed by separate complaints submitted to both the ACC and the BFIU.

The writ was filed due to the inaction of these agencies, the petition read.

Inaction despite having info

Citing Sections 4(1) and 23 of the Money Laundering Prevention Act, 2012, and Sections 20 and 27(1) of the Anti-Corruption Commission Act, 2004, the petition stated that the silence of the BFIU and ACC despite receiving specific information from the UK agency constitutes a gross violation of their law-bound duties.

Consequently, the petition sought departmental action against the responsible BFIU officials for causing financial loss to the state by failing to take timely measures, alongside an inquiry into the money laundering allegations.