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The National Board of Revenue (NBR) has served a notice on British American Tobacco Bangladesh (BATB), asking the country’s largest tobacco manufacturer to pay Tk2,054 crore in “evaded tax”.

According to sources, the NBR has found evidence that BATB in 2016 evaded value-added tax (VAT) and supplementary duty of the said amount by concealing information.

After receiving the report of an assessment committee formed in this regard, the revenue authority issued a letter on 21 September, directing its Large Taxpayers Unit (LTU-VAT) to take legal action to recover the amount.

After receiving the directive, the unit wrote to BATB, asking the company to pay the amount, said an official at the LTU-VAT office.

BATB is the top tax payer as a single entity and listed with the LTU-VAT office for payment of VAT.

The company’s “tax evasion” came to the fore in 2018.

At that time, the officials of the VAT department found discrepancies between the information given to the NBR, and the information disclosed in the audit report regarding the company’s local leaf consumption.

Based on this, they found prima facie evidence that Tk2,054 crore of tax had been evaded.

After this, a committee was formed comprising VAT department officials and external experts.

Based on the committee report, the LTU-VAT in August 2021 issued the “final demand” under Section 55(3) of VAT Act 1991, stating that  the demand for Tk2,054 crore was not established. This went in favour of the BATB.

Three months ago, the NBR summoned the file again.

As per VAT Act 1991, any decision under Section 55(3) is deemed to be void if the file is summoned within two years of the decision being made.

After summoning the file, NBR constituted a committee headed by its member Md Shahidul Islam to examine the matter and asked it to submit a report within 30 days.

Quoting the committee report, the NBR in its directive to the LTU-VAT stated that while issuing the “final demand” under section 55(3), proper procedures were not followed.

The NBR also said that representatives of BATB sought 30 days’ time when they were called to the hearing of the committee through a letter.

But they agreed when they were asked to appear on 9 September citing time constraints. But on that date, no representative of the company showed up.

Two days later, the company said that it had filed a writ petition in this regard with the High Court.

Md Shahidul Islam, the head of the NBR committee, could not be reached over phone.

When this correspondent called BATB Managing Director Shehzad Munim for his comment, he did not answer. An SMS was sent to his WhatsApp about the content, and a comment was sought, but no response was received till the writing of this report.

Contacted, Wahida Rahman Chowdhury, who was the commissioner of LTU-VAT when the “final demand” was issued under 55(3), said,  “The first demand is not proved beyond doubt. The latest directive is not logical.

“I am not an expert. The final demand was made on the basis of the expert opinions from the Institute of Chartered Accountants of Bangladesh (ICAB).”

Six companies will invest $70 million in various sectors in the Bangabandhu Sheikh Mujib Shilpa Nagar, Sabrang Tourism Park, and Jamalpur Economic Zone.

The sectors include industrial racking systems, manufacturing plants, tourism, kitchen appliances, air separation plants, and industry product processing.

Sources at the Bangladesh Economic Zones Authority (Beza) said land lease agreements with the companies will be signed on 27 September.

The firms have been allotted 21 acres of land at the three industrial enclaves, which is expected to create more than 2,594 job opportunities.

According to Beza, Linde Bangladesh will set up air separation plant factories with an investment of $17.44 million.

Among the six companies, Master Rack and Furniture will invest $ 7.12 million to set up industrial racking system manufacturing plant factories on three acres of land in Bangabandhu Sheikh Mujib Shilpa Nagar.

Sanjana Fabrics, OMC and SSL Hotel and Resorts will invest $43.21 million in setting up hotels and resorts.

Kimbo Manufacturing Industries will build a kitchen appliances manufacturing plant by investing $2.18 million on two acres of land in Jamalpur Economic Zone.

Master Racks and Furniture Managing Director Al-Mamun told The Business Standard (TBS), “Warehouses require racks to store goods. We make them. They are part of the logistics industry. This business is now growing. Once it was 100% import-dependent but now the country caters to 95% of its demand. Besides, there is a possibility of export. It is a market of about $20 billion. We are building a new factory to capture this market.”

“About 40 companies in Bangladesh make racks. The annual sales of racks in Bangladesh are worth Tk200-250 crore. We sell products worth Tk55-60 crore annually. Its market is getting bigger,” he added.

Beza Executive Chairman Shaikh Yusuf Harun said there will be some land lease agreements with some companies on 27 September. Companies from tourism and other sectors will invest in the EZs.

Beza sources said Linde Bangladesh Ltd will build a factory on five acres of land in Bangabandhu Sheikh Mujib Shilpa Nagar, investing $17.44 million.

Angela S Biswas, the Executive Secretary of Linde Bangladesh, announced that the company has received a Provisional Letter of Allotment from the Bangladesh Economic Zones Authority (BEZA) for the allocation of 5 acres of industrial land in the Mirsarai Economic Zone, Chattogram. they will use the land for the establishment of their new manufacturing facility.

Currently, the company is in the process of finalising the lease agreement with BEZA. This agreement is anticipated to be formalised on 27 September, pending the fulfillment of specific terms and conditions.

Linde Bangladesh Ltd has been a prominent presence in Bangladesh since 1953, evolving into one of the foremost gases and engineering firms in the country. Operating under the name Bangladesh Oxygen Ltd initially, it was recently rebranded as Linde Bangladesh Ltd. The company boasts an extensive range of industrial, specialty, and medical gases in its product portfolio, along with the country’s most extensive direct sales and distribution network.

At Sabrang Tourism Park, Sanjana Fabrics Ltd, OMC Ltd and SSL Hotel and Resorts will build hotels and resorts investing $20 million, $7.06 million and $16.15 million respectively.

Sabrang Tourism Park – the country’s first exclusive tourism park – is under construction in Cox’s Bazar.

The country’s largest industrial city, the Bangabandhu Sheikh Mujib Shilpa Nagar, is being constructed in an area of 30,000 acres of land in Mirsarai and Sitakunda upazilas of Chattogram and Sonagazi upazila of Feni.

The Beza is working toward establishing 100 economic zones across the country by 2041. The goal is to create employment for one crore people. The Beza also expects to produce and export products worth $40 billion annually in and from these economic zones.

Publicly listed ADN Telecom Limited — a provider of IT and telecommunication services — is set to acquire a 235-decimal plot of land in Gazipur at a cost of Tk2.3 crore. 

In a Dhaka Stock Exchange (DSE) filing on Thursday, the company informed that the purpose of acquiring the said land is future business expansion. But the detailed plan of expansion has not been disclosed by the company yet.

Md Monir Hossain, company secretary at ADN Telecom, said the company’s initial focus is to secure the land, as investments in land are traditionally lucrative.

“After purchasing the land, the company will determine how to use it for future business expansion,” he added.

This June, ADN Telecom decided to acquire a 10% stake worth Tk12 crore at Shohoj Limited — the pioneer of Bangladesh’s largest online ticketing platform “Shohoz”.

A month earlier, the company decided to construct a 13-storey commercial building and a data centre setup in the capital’s Badda area.

The first and second floors of the 13-storey building, which includes three basements, will be designated for the data centre.

The estimated total cost of the project was Tk70 crore financed through a syndicate loan from banks.

ADN Telecom was established in 2003. It raised Tk57 crore from the stock market through an initial public offering (IPO) in 2019.

Since its stock market listing, the company has been paying 10-15% cash dividends per year.

In the January to March quarter of the 2022-23 fiscal year, the company’s consolidated net profit stood at Tk3.48 crore, which was higher compared to the same quarter previous year.

On Thursday, the company’s shares closed at Tk127.5 apiece at the DSE, which was 5.2% higher compared to the previous session.

Institutional investors who bid for Asiatic Laboratories’ initial public offering (IPO) shares through book-building method have demanded their deposits back as the subscription process has been held up by the securities regulator since January this year.

The securities regulator suspended the subscription process after receiving a complaint that the company overstated in fixed assets.

Around Tk43.18 crore of 92 institutional investors who participated in the bidding is stuck in a Dhaka Stock Exchange (DSE) account for around a year, said sources.

An institutional investor is a company or organisation that invests money on behalf of other people. They include asset management companies, brokerage houses, merchant banks, etc.

The DSE Brokers Association of Bangladesh – a platform of trading right entitlement certificate (TREC) holders of the premier bourse – sent letters in this regard to the Dhaka Stock Exchange and the Bangladesh Securities and Exchange Commission (BSEC) last month.

The auction to determine the cut-off price of Asiatic Laboratories’ shares was held in October 2022. Institutional investors deposited money to the DSE’s account to participate in the bidding process at that time. The DSE then transferred the money to Asiatic’s account. The securities regulator suspended the company’s IPO subscription process in January this year.

Richard de Rosario, president of the DSE Brokers Association, told TBS, “Institutional investors have been suffering losses after their deposits got stuck in Asiatic’s account following the suspension of the company’s IPO. If the investors had that money they would invest it in the capital market, benefitting both themselves and the capital market, but now they cannot do that.”

“The BSEC has held up the IPO subscription, but a final decision should be taken on the matter. Due to the downturn in the capital market, institutional investors are desperate to get their money back,” he added.

In the book-building method, institutional investors participate in the bidding process for IPO shares by depositing money to the DSE’s bank account.  The DSE keeps the money of the bidders who get share allotment and return the other bidders’ money.

The investors’ money then is transferred to the company’s bank account. The company can start spending it in the areas stipulated in its prospectus after its stock market listing.

Why the IPO subscription was held up

On 15 January, the BSEC held up the electronic subscription of Asiatic Laboratories’ IPO shares until further notice.

The decision was taken due to some complaints against Asiatic Laboratories, the gravest of which were regarding overstatement of the company’s fixed assets, and dispute over its ownership.

The securities regulator has formed an enquiry committee to look into the matters, but they have not made a decision regarding its IPO.

The Financial Reporting Council (FRC) has found that Asiatic Laboratories overstated the value of its properties. Market insiders said the pharmaceutical company did that in an attempt to obtain better prices for its shares.

The council submitted its findings to the commission.

In August last year, the securities regulator allowed Asiatic Laboratories – a manufacturer of pharmaceutical products – to raise Tk95 crore through IPO under the book-building method.

The company said in its IPO prospectus that it will use the fund to begin producing anti-cancer drugs.

Of the Tk95 crore, it will use Tk58.05 crore to buy and install machinery, Tk6.26 crore to build a factory, and Tk28 crore to repay bank loans.

Earlier, in a bidding through the electronic subscription system by the institutional investors, the cut-off price of the company’s shares was determined at Tk50 each.

The general investors will get the shares at Tk20 each as per the BSEC rules.

With inflation on the rise and a growing unemployment crisis, Bangladesh is witnessing a spike in fraudulent activities in its cyberspace, most of which are linked to bogus work-from-home job opportunities.

These scams take advantage of people’s desire for remote work and financial instability, particularly through deceptive messages sent via SMS and WhatsApp, promising substantial daily earnings for minimal effort and time.

What’s even more concerning is that the headhunters of these online scams contact people without any selection, even those individuals who are not looking for a job in the first place get offered lucrative job opportunities.

For instance, Humayun Kabir, a banking professional, and Nayem, a university student, have both been enticed by such scam offers flooding their messaging platforms.

Humayun recently received an enticing message from an unknown sender offering a daily wage of Tk2,000 for a part-time job.

Similarly, Nayem received a message that read, “There is a part-time job, you can use your mobile phone to operate at home, you can earn Tk200-3,000 a day, 10-30 minutes a day, waiting for you to join. Reply 1 and click the link to join us ASAP.”

However, these tantalising job offers don’t just lead to disappointment – they are fraught with danger. The included links, when clicked, lead to a WhatsApp chat or re-direct the user to a scam-ridden website that threatens to compromise sensitive data or ploy to steal the unsuspecting target’s money.

In some extreme cases, these links can even provide total control of the users’ device to the scammer.

Cybersecurity expert Professor BM Mainul Hossain at the Institute of Information Technology of Dhaka University advises caution regarding such suspicious offers.

“It’s crucial to verify any too-good-to-be-true job offers independently and refrain from clicking on unsolicited links. The cyber crooks are using social engineering techniques to trick people into providing sensitive information”, the professor says.

How the work-from-home scam operates

“Not all of them have the intention to steal data. Sometimes, there’s an individual who engages in chat conversations and even conducts seemingly professional interviews. In certain cases, these fraudsters may initially offer small sums of money, only to later entice victims to invest significant amounts, and then abruptly cut off all communication,” explains BM Mainul Hossain.

He further described how scammers put their victims in a group on a messaging app called Telegram. In that group, they make fake websites that look super real, like fancy crypto trading sites. The scammers ask victims to send them money and complete certain tasks in order to multiply their investment.

To make it even more deceptive, scammers make fake online wallets to trick victims into thinking their money is safe.”

The cybersecurity expert shed a concerning reality, “These SMS scams don’t just come as job offers, they may appear in the form of business deals or offers to go abroad with lucrative packages.”

Is the scam too hard to combat?

Professor Mainul emphasises keeping devices updated with the latest security features and software and not installing unverified third-party applications.

He points out that mobile network operators could play a role in combating this potential scam by identifying and flagging such messages.

However, Prof Mainul notes a decline in their interest in providing customers with this service, saying, “To detect these obvious scamming methods, where a message is being sent to thousands of people every day, containing an unsolicited link and promises of money, sim companies wouldn’t need to build any complex algorithms; it can be easily identified and blocked.”

The cybersecurity expert stresses that such an investment by sim companies in flagging these scam messages could further enhance customer trust and their brand reputation.

“With proper acknowledgement of this scam and efforts of relevant bodies such as flagging of sim operators and monitoring of Cyber Police Center and other cyber security agencies, preventing this scam should not be a huge challenge,” says Mainul Hossain.

When The Business Standard asked the Cyber Police Center (CPC) of the Criminal Investigation Department (CID) whether they acknowledge this scam as a threat or not, they replied positively and said, “The latest rise in such deceptive messages is on their radar, and CPC has been working tirelessly to track down these fraudsters.”

They urge the public to report any such suspicious activities to the authorities.

According to CPC, these types of scams in Bangladesh’s cyberscape were driven during the Covid-19 pandemic as people stayed home and became more inclined to internet transactions. Now it has started all over again.

Police say “These messages are not only circulated through SMS or Whatsapp or social media, scammers are operating through email as well to make it seemingly  more professional.”

People often find themselves stuck in this scheme, sending money every day. Sometimes, they end up losing all the money they’ve saved up over their whole life. Some even borrow money from their friends, and it all disappears into this scam.

A global cyber epidemic

Bangladesh is not alone in facing this issue; job-related scams have surged worldwide.

The United States reported a nearly threefold increase in job and employment agency-related scams from 2020 to 2021, from 7,324 to 21,848 in the third quarter of each year, according to a report published in the Los Angeles Times on 23 January 2023.

Another report in the Washington Post on 27 January 2023 asserts that job-related scams on the internet cost Americans approximately $2 billion every year, as stated by the Better Business Bureau.

It further reads that the Federal Trade Commission (FTC) received over 22,000 reports of cyber employment fraud between July and September of 2022 alone, resulting in total losses amounting to $78 million.

Similarly, Canada’s Edmonton Police Service received 148 reports of employment scams in 2022, resulting in a financial loss of $359,831.

In India, over 30,000 people lost 200 crore rupees (over $24 million) in January through work-from-home scams falsely representing reputed e-commerce companies, Times of India reported quoting a Delhi Police source on 28 January 2023.

An October 2022 study by messaging security provider SlashNext analysed billions of link-based URLs, attachments, and natural language messages in email, mobile and browser channels over a six-month period, and found more than 255 million attacks. That’s a 61% increase in the rate of phishing attacks compared with 2021.

The study revealed that cybercriminals are shifting their attacks to mobile and personal communication channels to reach users. It showed a 50% increase in attacks on mobile devices, with scams and credential theft at the top of the list of payloads.

Internet scams are far from new

It’s worth noting that internet scams continue to evolve alongside technology, and schemes similar to these have been occurring for a while now.

For instance, Nigeria was at the centre of infamous scam operations in the ’90s known as “419 scams” or “Nigerian prince scams.”

These scams involved an email from a “Nigerian prince” asking the recipient for help to claim his “fortune” at the expense of personal banking details.

Common fake job scam techniques

• Scammers create phoney job ads on job websites or social media to lure job seekers with attractive offers.
• Scammers pretend to be genuine companies, offering fake job positions or promotions.
• Scammers send unsolicited messages via SMS, WhatsApp, or email, falsely claiming job offers.
• Scammers send emails that look real, asking for personal or financial information like bank details.
• Scammers request payment or deposits for interviews or processing, disguised as refunds or fees.
• Scammers use stolen information for identity theft or fraud.
• Scammers ask for money upfront for training or services, then vanish, leaving victims without jobs or money.

Essential safety measures

• Do not open any links.
• Do not respond to the sender or provide personal or financial details.
• If unsure of a message’s legitimacy, contact the sender through verified contact details, such as an official website or app.
• Report to the Cyber Police Center and delete suspicious messages.

Highlights

• The rupee trade with India was launched on 11 July
• At that time, Sonali Bank and Eastern Bank assumed responsibility for opening LCs in rupees
• Trust Bank, Social Islami Bank, AB Bank, NCC Bank, Prime Bank, and Premier Bank have also sought permission to conduct trade in rupees
• The applications of these banks are currently under review

More Bangladeshi banks have shown interest in conducting trade in rupees ever since Bangladesh and India launched a rupee trade settlement mechanism in July this year.

The initiative was taken to alleviate the reliance on the US dollar, which has traditionally been the primary currency for Bangladesh’s external trade.

The Bangladesh Bank (BB) has already granted permission to two more banks — Islami Bank and Standard Chartered Bank — to engage in trade with India using rupees, bringing the total to four banks participating in this arrangement.

On 11 July when the rupee trade with India was launched, Sonali Bank and Eastern Bank (EBL) assumed responsibility from the Bangladesh side for opening Letters of Credit (LC) in rupees, rather than in dollars, for the import and export of goods with India.

In addition, six more banks — Trust Bank, Social Islami Bank, AB Bank, NCC Bank, Prime Bank, and Premier Bank — have submitted applications to the central bank for authorisation to conduct trade in rupees, a senior central bank official told The Business Standard.

“The applications of these banks are currently under review,” said Zakir Hossain Chowdhury, executive director of the Bangladesh Bank.

Mohammad Mamdudur Rashid, managing director and CEO of NCC Bank, said, “We applied to join the rupee trade a month ago. This form of bilateral trade, conducted outside of international currencies, is a novel endeavour for our banks. Nevertheless, we believe it presents opportunities for our institutions, which is why we are keen to be part of it.”

Referring to the process of trade in rupees, bankers said, first the traders will export the goods and receive the price in rupees. It will be deposited in the Nostro account of the concerned bank in India. Later, the trader can pay the import cost from the earned rupees. By doing this, the loss that we had in case of conversion from dollar to rupee or taka, will not happen anymore.

This process of trade is likely to be expanded in the future, a policymaking officer of a private bank said, “Currently, 18 countries in the world trade in rupees. As our bilateral trade increases, we may also export to other countries and receive payments in rupees. These rupees will help meet the cost of imports from India.”

So far, EBL has opened and settled Pran Toast worth INR1.1 million for Pran Group and Packing raw materials worth INR1.3 million for the same group.

Amit Kumar, country head of the State Bank of India in Bangladesh, told The Business Standard, “In July, we opened an LC for import of vehicles and export of crude soya oil with the Neetal-Niloy Group. A total of four LCs of INR 16.1 million in imports and INR 12.4 million in exports have been opened so far.”

Apart from this, Standard Chartered Bank, Bangladesh has opened import and export LC for Walton Hi-Tech Industries PLC, a concern of the Walton Group.

Ahmed Shaheen, additional managing director of EBL, said, “Trade in rupees is a bit of a new experience for our banks. It has just begun. So initially, import and export will be in small amounts but the volume will gradually increase.”

Pointing out that it is possible to meet the import cost of about $2 billion with rupees, he said, “Currently, we export goods worth about $2 billion to India annually. That is, out of the $14 billion cost of our imports, $2 billion dollars of payment can be made in rupee.”

“If trade with India was in dollars, those who buy products from us in India would have to face trouble in fixing the prices of their products. But they do not have to do that conversion while trading in rupees. They will buy in rupee and sell in rupee, as a result, it will be easier to determine their prices,” he said.

The experienced banker also said the pressure on the country’s reserves will decrease if trade in the rupee picks up more steam.