ரஹ்மான் கானின் வங்கி மோசடி?

ரஹ்மான் கானின் வங்கி மோசடி?

Reckless Nepotism undid the Good Work

Saddled with Rs. 40 crore of outstanding loans against close relatives of the former chairman Rahman Khan and a scam where nearly Rs. 60 crore have been swindled, the Bank requires monumental effort to nurse back to health.

By A Staff Writer

Bangalore: The Amanath Cooperative Bank has witnessed another change of guard within a year. Noted builder and businessman Ziaullah Sheriff, who heads the India Builders Corporation took over as the new chairman on August 3. Mr. Sheriff has been ushered into the office with high hopes of healing the Bank back to health. Saddled with a poor image in the wake of the tragic on-goings within the bank during the last one year and huge Non-Performing Assets (over 38 per cent according to a paper circulated by the Bank itself), the new chairman will have to muster enough courage to nail the three former employees of the bank, i.e., general manager Asadullah, cashier Shafiullah and Hidayatullah wanted by the police for a scam. Besides, his skill will be put to test in recovering huge outstanding loans going up to the tune of Rs. 39 crore from close relatives of former and founder Chairman of the Bank Mr. Rahman Khan, Rajya Sabha MP and deputy leader of the Congress in that House.

Mr. Mumtaz Ahmed Khan who took charge on August 17, 2002 did not take much time to discover that none but the past chairman and the man who had taken the Bank to glorious heights himself was at the centre of much of the bad debts, technically called Non-Performing Assests (NPAs). That everything is not hunky dory with Amanath Bank can be imagined from the fact that against its 38 per cent NPAs, the NPAs of State Bank of Mysore are just 1.27 per cent and that of the Syndicate Bank around 4 per cent.

In a letter to Rahman Khan on November 4, 2002, Dr. Mumtaz sent a list of Rahman Khan’s kith and kin who had been the recipients of the Bank’s loans.

The list virtually reads like a Who’s Who of the family of the former chairman. (See the list ).

Sl. No.	Account No.	Name of the Borrower	Relationship	Outstanding as on 31.10.2002
				Principal	Interest
01	MNOD 10358	M/s K. H. Traders	Mr. Khalid Hussain Khan Nephew of K. Rahman Khan (Sister’s son)	1,40,00,000.00	48,13,944.62
02	MNOD 10359	M/s National Enterprises	Mr. Mujahid Hussain Khan Nephew of  K. Rahman Khan (Sister’s son)	1,40,00,000.00	48,13,944.62
03	MNOD 10630	M/s Classic Traders	Mr. S. A. Junaid Nephew of K. Rahman Khan (Sister’s son)	90.00.000.00	35,42,629.63
04	MNOD 10388	M/s C.S.A. Software	Surety by Mr. Maqsood Ali khan S/o K. Rahman Khan Security AHDC in which K. Rahman Khan was MD. Later on Maqsood Ali Khan became MD.	1,40,00,000.00	16,08,559.08
05	MNRE 1883	M/s C.S.A. Software	Surety by Mr. Maqsood Ali khan S/o K. Rahman Khan Security AHDC in which K. Rahman Khan was MD. Later on Maqsood Ali Khan became MD.	25,94,216.98	27,84,499.30
06	MNRE 1895	M/s Byte Cell	Surety by Mr. Maqsood Ali Khan S/o Rahman Khan Security AHDC in which K. Rahman Khan was MD. Later on Maqsood Ali Khan became MD.	23,81,442.38	25,62,938.70
07	MNRE 1875	M/s Ken Keying	Surety by Mr. Maqsood Ali Khan S/o Rahman Khan Security AHDC in which K. Rahman Khan was MD. Later on Maqsood Ali Khan became MD.	22,12,052.68	23,87,788.80
08	MNRE 1884	M/s Phonix Graphics	Surety by Mr. Maqsood Ali Khan S/o Rahman Khan Security AHDC in which K. Rahman Khan was MD. Later on Maqsood Ali Khan became MD.	23,79,846.48	26,44,806.40
09	MNRE 1876	M/s Bitech Computers	Surety by Mr. Maqsood Ali Khan S/o Rahman Khan Security AHDC in which K. Rahman Khan was MD. Later on Maqsood Ali Khan became MD.	22,93,787.58	24,76,258.10
10	MNOD 174	M/s. Mama Designers and Builders	Mr. Ayub Khan (Son-in-Law)	5,89,39,181.88	59,73,683.25
11	MNOD 10288	M/s. Mama Manufacturing Trading	Mr. Ayub Khan (Son-in-Law)	44,88,888.88	4,73,266.82
12	BROD 41	M/s. Mama Transcription Services	Mr. Ayub Khan (Son-in-Law)	24,19,548.58	2,47,787,28.00
13	BRRE 17	M/s. Mama Transcription Services	Mr. Ayub Khan (Son-in-Law)	35,84,689.88	18,45,116.88
14	SNVH 228	M/s. Royal Transport	Partners: 1.        Shazia Sultana Daughter-in-Law of K. Rahman Khan 2.        Shanaz Anjum Daughter of K. Rahman Khan 3.        Abida Tabassum Daughter of K. Rahman Khan 4.        Maqsood Ali Khan Son of K. Rahman Khan	31,87,687.38	82,683.98
15.	SNVH 229	M/s. Azad Transport	Partners: 1.        Ayesha Rehman Wife of K.Rahman Khan 2.        Maqsood Ali Khan Son of K. Rahman Khan 3.        Mansoor Ali Khan Son of K. Rahman Khan	31,87,687.38	82,683.98
16	BROD 958	M/s. Decipher Systems Pvt. Ltd.	Mr. Mansoor Ali Khan Son of K. Rahman Khan is one of the director	5,16,56,368.99	81,77,893.38
17.	MNOD 18243	M/s. K.K. Oversees Trading Corporation	Partners: 1.          Ayesha Rehman Wife of K. Rahman Khan 2.          Maqsood Ali Khan 3.          Masood Ali Khan 4.          Mansoor Ali Khan Sons of K. Rahman Khan	2,58,88,888.88	83,63,169.81
18.	MNRE	Mr. Shafi Ahmed Khan		63,39,691.48	66,67,898.29
19.	MNRE 1923	Mr. Nisar Ahmed Siddique	Mr. Maqsood Ali Khan S/o K. Rahman Khan	31,18,714,75	32,78,351.48
20.	MNOD 18447	M/s. Al-Ameen Housing Development Corporation	Mr. Maqsood Ali Khan S/o K. Rahman Khan	1,65,28,132.39	38,25,413.24
21	MNOD 18517	M/s. K.K. Educaiton and Charitable Trust	Mr. Maqsood Ali Khan S/o. K. Rahman Khan one of the Trustees.	6,82,44,846.33	14,92,634.65
22.	MNOD 18491	M/s. Softline Software Corporation	Partnership Fira:  Three Sureties are there, One of this is Mr. Maqsood Ali Khan S/o. Mr. K. Rahman Khan	65,61,691.46	……
23.	ILOD  7	M/s. K.K. Polyflex	Director K. Ahmed Khan Brother of K. Rahman and another director is his nephew (S/o. K. Ahmed Khan)	42,96,161.65	…..
24	ILRE 4	M/s. K.K. Polyflex	Director K. Ahmed Khan Brother of K. Rahman Another Director is his nephew (S/o. K. Ahmed Khan)	25,74,943,48	31,433.48
Total				88,75,50,634.27	9,27,08,326.49

The loans generally disbursed to a variety of firms belonging to his wife, sons, daughters, brothers, and their in-laws go up to the tune of Rs. 39 crore. Dr. Mumtaz Khan, while sending the list reminded Rahman Khan that outstanding dues towards borrowers of his (Rahman Khan’s) group were huge and needed his active cooperation for recovery. He said such was the dimension of the NPAs that the ‘net worth’ of the bank was likely to be wiped out. While the loans go up to Rs. 39 crore, the RBI sources indicate that the collateral guarantees were not even 10 per cent of its worth. He therefore sought Rahman Khan’s cooperation to substantially improve the recovery.

But the new chairman had little success. Far from helping the recovery, Mr. Rahman Khan circulated notes and letters projecting his contribution in taking the Bank from a humble repository of Rs. 3 lakh in 1973 to a Rs. 500 crore institution. Undoubtedly, it was Khan’s stewardship which took the Bank to such heights but there was little realisation that it was hardly the justification for appropriating loans worth nearly 10 per cent of the total deposits.

It is also without doubt that the Amanath (literally meaning ‘sacred trust’) Bank received unstinted support from the Muslim community whose bulk comprised, till then, petty businessmen. And with the rise of the Bank, Mr. Rahman Khan’s stock also went up. He was twice nominated a member of the Karnataka Legislative Council and twice became Member of the Rajya Sabha. He even headed the State Minorities Commission and acquitted himself well. His most sterling achievement was the comprehensive survey of the minorities, which came for fulsome praise. (The Islamic Voice being a chronicler of the community, has never been miserly in flashing all these on its pages without any favours.)

But then started the descent of the Bank. As stories of Amanath Bank’s reckless lending to kith and kin of the former Chairman became legion, bank’s credibility came down by several notches. Pressure built up within the Bank and the Al-Ameen family to remove Khan from all institutions that call for community’s confidence and support. In view of the outcry, Rahman Khan owed the moral responsibility and demitted office during August last year.

Yet there was no recovery of loans in sight from the members of his family.

Rather a war of words ensued between the former chairman and the new President (some details have already been on our pages last month.)

Mr. Ziaullah Sheriff took over the reins of the Bank last month amid the booming guns. Having been a director for several years, Mr. Sheriff is known as a successful businessman and would need the goodwill and the support of the community in overcoming the crisis.

Rahman Khan episode is however not the lone instance for which the Amanath Cooperative Bank is in the news. Lending, reckless at that, is no crime for it to be in news. But that merely shows the culture of favouritism and nepotism in a bank that has been in its infancy and needed to maintain high standards of fairness. Parallel to this, a scam involving a huge piece of land worth Rs. 60 crore has been brewing in the headlines. With questions raised in the Legislative Council and CoD inquiry ordered, one of the accused, Hidayatullah, has been arrested and remanded to 15 days of judicial custody on August 5. Contours of the scam, in which some builders are alleged to be involved, are yet to emerge in public. New President Sheriff while seeking endorsement from the Muslim elite of the town at a meeting in the premises of the Bank on August 12 did refer to the scam but scrupulously avoided any reference to the huge outstanding dues with the family members of the former chairman Rahman Khan. It was left to a few ‘dissident’ speakers to raise the pointer. The meeting where he was lustily cheered, ended amidst a lot of poetry and biryani but few concrete measures by which the Bank would rerail itself.

Even while wishing the new President all success in regaining the glory of the Bank, it will not be out of place to caution him that the Bank is sick beyond imagination. It would need a monumental effort on his part to bring to book the offenders who have squandered the goodwill the institution had earned during the last 30 years. The men who man the public institutions need to maintain probity in public life. Confidence can be reclaimed by making genuine efforts to punish the offenders and not merely by pledging personal assets to bale out the Bank from its current crunch.

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