Citizens' Issues
Bangladesh army hero charged over $400 million Ponzi scam

Bangladesh Police accused retired Lt Gen Harunur Rashid, the president of Destiny Group, and 21 other senior officials of the group of stealing money from two projects set up by the direct-selling company between 2006 and April 2012  

Dhaka: Bangladesh's anti-graft agency has charged a former army chief and war hero with stealing $400 million from nearly two million investors through alleged Ponzi schemes, reports PTI quoting police.
The agency accuses retired Lieutenant General Harunur Rashid, the president of Destiny Group, and 21 other senior officials of the group of stealing the money from two projects set up by the direct-selling company between 2006 and this April.
"In total, they embezzled 32.8 billion taka ($402 million)," police inspector Shariful Islam told AFP, quoting from the case records.
A Ponzi scheme is an illegal investment scheme that involves paying returns to investors out of money paid in by later investors, rather than from revenues generated by any real business transactions.
The Destiny Group allegedly collected 23.35 billion taka ($286 million) for a tree harvesting project, Islam said.
The other project was a credit society in which the Destiny Group collected deposits and said the money would be returned with a substantial rate of interest within a certain number of years.
Destiny Group, with nearly 1.7 million investors, had been suspected by authorities of running Ponzi schemes since it was set up in 2000.
The Bangladesh central bank froze the accounts of the company's directors in May after a probe found suspected gross irregularities.
General Rashid led Bangladesh's powerful military in the late 1990s. He is also one of the country's most decorated war heroes.
None of the accused has been arrested and no court date has been set. 
The company denied any wrongdoing. "We are going to fight for justice at the court," Destiny Group managing director Mohammad Rafiqul Amin, one of the accused, said.


SBI cuts interest rate on home, car loans by up to 0.5%

SBI cut interest rate on home loans of up to Rs30 lakh to 10.25% while the new car loan would be available at an interest rate of 10.75% for seven year loan


New Delhi: State Bank of India (SBI) has slashed lending rates on car and home loans by up to 0.5%, a day after 1% cut in SLR by the Reserve Bank of India (RBI), reports PTI.

SBI has reduced interest rate on home loans of up to Rs30 lakh to 10.25% from existing 10.50% (after 0.25% concession over the card rate), a senior bank official said.

On the home loans of beyond Rs30 lakh but less than Rs75 lakh, the new rate will be 10.40% against the existing 10.75%, down 0.35%.

The new rates will be effective from 7th August, the official added.

The base rate or minimum lending rate of SBI stands at 10%. Base rate is the benchmark rate below which a bank cannot lend.

With regard to the car loan, the reduction is to the extent of 0.5%. The new car loan would be 10.75% against the existing rate of 11.25% for a seven-year loan.

Now for every Rs1 lakh, a customer has to pay Rs1,699 EMI against Rs1,725 per month earlier. SBI claimed this as the lowest EMI. With the reduction, a borrower would end up saving Rs312 per year on every one lakh.

on Tuesday, RBI in its quarterly monetary policy review reduced statutory liquidity ratio (SLR), the amount of deposits that have to be invested in government bonds and other liquid assets, by 1%.

RBI Governor D Subbarao cut SLR to 23%, thereby releasing around Rs68,000 crore of additional liquidity into the system, even as he left all the key interest rates unchanged in the anti-inflationary stance.

Soon after the policy review yesterday, SBI had hinted at lowering lending rates to retail customers.

"The one percentage point reduction in the SLR will release an additional Rs10,000 crore for SBI. That coupled with Rs6,500 crore released through the reduction in export refinance, may lead the bank to cut lending rates in retail," Chairman Pratip Chaudhuri had said.

It is always better to deploy money at 10.50% return than the average of 7.5% which the SLR gives, Chaudhuri had said.


Public Interest Exclusive
News for Sale; says Consumer Affairs about Washington Post grant

Consumer Affairs, a US-based consumer news and advocacy site says that the $500,000 grant from Ford Foundation to Washington Post, one of the most reputed global newspapers, is no different from buying influence by paying an individual journalist

Bribing reporters is seen as a worldwide practise as it reporters pay the rent and enables politicians and companies to generate favourable stories about themselves. But that would never happen in the United States. You just give the money to the publisher and let it trickle down to the reporters.

The Ford Foundation one-year grant of $500,000 to The Washington Post, one of the most reputed global newspapers, is supposed to be used to “expand the paper’s government-accountability reporting”.

Earlier in May this year, the Ford Foundation gave $1 million to the Los Angeles Times, saying it wanted to experiment with “new approaches to preserve and advance high-quality journalism.” The money is supposed to be used to report on the Vietnamese, Korean and other immigrant communities in Southern California.

This is basically the PBS model of journalism: ‘underwrite’ the production of stories or documentaries that fit your worldview. It’s not as crass as a company looking for a favourable story but it’s not all that dissimilar either.

If one looks closely there are plenty of examples of slightly creepy transactions in the world of underwritten content. To take an example drawn from personal experience, a professional association of architects underwrites a documentary about ‘green’ building practices. You can bet the resulting program makes architects look good.

One could, and no doubt will, argue that if green buildings are good. But would the show have been produced quite that way—or at all—had it not been for the architects’ cheque books?

None of this is new to the Ford Foundation, which for years has lavished money on ‘public’ broadcasting, thus ensuring that what the Ford Foundation thinks is important gets airtime.

In fairness to Ford, anyone can apply for a grant to support just about anything. “Our grant making focuses on reducing poverty and injustice; promoting democratic values; and advancing human knowledge, creativity and achievement,” the foundation’s website explains.

Ford says it makes about 1,400 grants a year. Last year, it distributed $422 million worldwide.

Bang for the buck
The Columbia Journalism Review, which calls itself as a watchdog of the watchdogs, recognizes that Ford is buying influence: “The Ford Foundation has recognized that if what it wants is public-service journalism with a broad reach, a big daily still gives it the most bang for the buck,” the editors of wrote in an editorial.

There’s nothing wrong with giving away money. The question, in the case of newspapers owned by large, for-profit corporations is whether it’s quite right to accept money to influence news coverage.

After all, consumers buy the Washington Post and the Los Angeles Times because they trust their editors to select the most important news stories to cover each day and to ensure that those stories are covered fairly and accurately. They don’t expect a third party’s cheque book to be a factor in the editors’ decisions.

Journalists used to, and perhaps still do, take great pride in turning down bottles of expensive wine, assorted bling and the occasional junket to nowhere. Taking money to cover a particular topic isn’t all that much different, some would say, especially if it is not disclosed.

Will readers know which stories are being funded by the Ford Foundation? Mediamen hound everyone else about transparency but they’re not always its greatest practitioners.

This may sound like nitpicking but it’s a slippery slope the Post and Times are beginning to slide down. Oddly, none of this seems to be a matter of even the slightest debate in journalism circles. Purists would say that journalists should cover stories without regard to whether those stories produce ratings, circulation or money. But maybe the purists have all taken jobs somewhere else.

(Courtesy: James R Hood)

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