The government is considering steps against Destiny-2000 Ltd 'to protect people from deception', finance minister A M A Muhith said on Saturday. "A commission like the one on Jubok will be formed to bar asset transfer by such firms," Muhith told reporters at his office.
Muhith's remarks followed recent newspaper reports on 'illegal banking' by Destiny Group.
"Media reports on Destiny in the past few days have created an emergency-like situation," he said. "The government can't sit idle without taking action in this situation."
"Jubok couldn't transfer all assets as its properties were confiscated. In that way, the clients can be compensated to some extent. A commission will be formed in the same manner," he said.
He also said the finance and commerce ministries and relevant departments have already started working to form the commission.
Jubo Karmasangsthan Society, better known as Jubok, was found guilty of illegal banking by a central bank investigation in July 2006. It was asked to repay Tk 1 billion it owed its depositors.
Jubok was enlisted as a 'society' under the government's Registrar of Joint Stock Companies.
Earlier, the parliamentary standing committee on commerce ministry decided to request the finance minister and the central bank governor for action against Destiny-2000 Ltd-like MLM companies.
Following the parliamentary watchdog's move, the Bangladesh Bank on Apr 1 issued a circular warning people against investing in unapproved banking institutions.
"It is to notify all that some institutions under different names are operating like banks in various districts across the country. They are collecting money from people by promising an abnormally higher rate of interest and profit," read the central bank statement.
62 registered MLM Cos
On mar 6 last year, then commerce minister Muhammad Faruk Khan had said there are 62 registered MLM companies operating in Bangladesh.
He told parliament that only Destiny has 4.5 million clients. He had said other MLM companies had fewer clients than Destiny. Another prominent MLM company is Unipay-2 U.
Asked about actions against Destiny, Muhith said, "I couldn't see the reports on Destiny by Bangladesh Bank and other organisations as I was abroad. I've seen them today (Saturday). It seems to me that Jubok-like actions are needed in this regard. We'll take those steps."
He said the government is 'disturbed' by the media reports on Destiny.
Two weeks ago, the central bank sent a report on Destiny to the finance ministry. The report alleged that Destiny-2000 was conducting illegal banking.
Law on MLM Cos
Finance minister on Saturday said the government has taken steps to formulate a law to bring MLM business under legal framework.
The government took steps to formulate law after clients of another prominent MLM company Unipay-2 U took to the streets in 2010 following allegations of deception by the company.
A commerce ministry official, requesting anonymity, told bdnews24.com that they have already finalised a draft of the law but could not present it to the cabinet due to objection by the public administration ministry.
"The draft proposed to form a directorate and appoint staff there. But the public administration ministry is not giving its nod about recruiting manpower. So, the draft could not be presented to the cabinet," he said.
Jubok clients not repaid even after 6 years
Clients of Jubo Karmasangsthan Society, better known as Jubok, are yet to be repaid though six years have passed the MLM company was shut.
After an investigation found Jubok guilty of illegal banking the central bank asked it to stop illegal operations and repay Tk 1 billion it owed its depositors by Mar 2006.
The government shut Jubok as it had failed to repay its clients within the stipulated time.
After the current government took charge, a commission headed by the former central bank governor Mohammed Farashuddin was formed to make proposals on Jubok and how to repay its clients.
The commission proposed to sell Jubok's assets to repay the clients and also asked to form a permanent commission to oversee the matter.
Following the proposal, the government formed a permanent commission headed by former joint secretary Rafikul Islam. But the Jubok clients are yet to be repaid.
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