The land was purchased by the company for Tk 14.5 crore. However, sand worth Tk 142 crore was allegedly shown as being dumped for land filling. This undermines the proverb that the sun is hotter than the sand. By inflating costs in this way, the board of directors of Fareast Islami Life Insurance embezzled Tk 200 crore from the company in two phases.

There is also evidence that, in order to withdraw these enormous sums, the minutes of board meetings were fabricated, according to our investigation. Sushanta Sinha’s investigative report was presented in Partha Roy’s video.

In 2013, a piece of land in Mirpur called Goranchatbari was bought jointly by the Fareast Islami Life Insurance Employees Cooperative and the Prime Insurance Employees Cooperative. According to the deed, the price of 763 decimals of land was shown as Tk 14.5 crore. But the development cost, including sand filling, was shown at ten times the land price — Tk 142 crore.

Former IDRA member Sultan Abedin Mollah questioned: “Is this really land at all? Or an abandoned river? Or Tk 142 crore worth of sand to fill a pond? This appears to be an unusual and disproportionate investment.”

Local witnesses said that after purchasing the land, Fareast did not carry out any development work, such as sand filling. A local journalist also confirmed that no sand was filled after the land was bought. Another resident near Fareast’s land in Goranchatbari said the land remains in the same state as when it was purchased.

At the 169th board meeting of the company on July 1, 2013, it was decided to establish the Employees Cooperative and accept a Tk 50 crore loan for purchasing land in the cooperative’s name. However, there was no decision to purchase the Goranchatbari land. Later, Fareast’s CEO and MD, Hemayet Ullah, fraudulently inserted it into the board meeting records. At the 211th board meeting, the inclusion of a Tk 71 crore loan to Prime Employees was also found to be fraudulent.

Former IDRA member Mollah said: “It is not the job of insurance companies to buy land or provide housing loans in this way. Under no circumstances can one insurance company lend money to another.”

Although the actual cost of land registration was Tk 2 crore, “miscellaneous expenses” were shown as Tk 77 crore. Thus, the Fareast board of directors extracted another Tk 75 crore from the company under the guise of inflated costs.

Iftekharuzzaman, Executive Director of Transparency International Bangladesh (TIB), said:
“This financial scam is so massive that it is an understatement to call it ‘pond theft.’ It is one of the biggest corruption scandals in the country, surpassing the infamous pillow–curtain scandal.”

Fareast also falsified its financial statements to show the inflated land value. In the 2016 annual report, land and building development costs were shown as Tk 237 crore. But in the 2017 annual report, the same 2016 costs were mysteriously doubled to Tk 579 crore.

Professor Shibli Rubaiyat Ul Islam, Chairman of the Bangladesh Securities and Exchange Commission (BSEC), said: “Once a financial report is made public or submitted to a regulatory body, there is no scope to change it. If it has been done, it is definitely a crime. Such a major alteration cannot be called a mistake — it is deliberate. We will investigate the matter and take punitive measures.”

The reported land size also changed from time to time. While the deed states 763 decimals, in other records it was shown as 628 decimals, and sometimes 750 decimals. According to IDRA, the embezzlement of Tk 142 crore through these irregularities is only a “small part” of Fareast’s broader fraud.

The Insurance Act prohibits cash transactions. However, Fareast Islami Life made cash payments totaling Tk 142 crore. The company also purchased the land a month before obtaining IDRA’s approval. Similarly, Fareast ignored the legal requirement to obtain IDRA’s clearance before purchasing land from the Prime Insurance Employees Cooperative for Tk 71 crore — a clear violation of the law.

Dr. Mosharraf Hossain, member of IDRA, said: “Some insurance companies purchase and sell land under various pretexts. We have now prepared guidelines on what documents must be submitted for investment approval to prevent such irregularities.”

Shockingly, Managing Director Hemayet Ullah was listed as both the buyer and the seller in the land purchase deed between Fareast Life Insurance and the Fareast Employees Cooperative. Attempts to contact the Chairman and CEO of Fareast by telephone went unanswered.

PTC by Sushanta Singha: After buying land at Tk 2 lakh per decimal, its value was later shown as Tk 18 lakh per decimal — and then inflated again to Tk 30 lakh per decimal. In this way, the board of directors of Fareast Islami Life Insurance extracted Tk 142 crore from the company, claiming it was for land development.

But the so-called “development” is nothing more than two signboards and a tin-shed house. Locals confirmed that no work was ever done on the land.