Tuesday, May 15, 2018

Khaleda Zia corruption conviction: Meritorious or Malicious?

What should one make of the prosecution and conviction of Khaleda Zia, the leader of Bangladesh's main opposition party for offences involving alleged embezzlement of around Tk 21 million ($252,000)?

Khaleda Zia, was convicted in February 2018, and is currently in jail serving a five year sentence of imprisonment. In March, the High Court granted her bail pending an appeal, but this order was stayed by the Appellate Division which ruled that it would consider her bail application in a hearing on May 8. This court has now heard arguments and a much delayed decision will be given by the Appellate court on Wednesday.

Is there any merit in the case against her or is this just about malicious politics, to remove her from involvement in the elections as Lord Carlile, a member of her legal team (recently refused entry into Bangladesh) believes? 

The context of the prosecution would of course suggest that it is political. Whilst all 15 of the criminal cases lodged against the current prime minister Sheikh Hasina before 2009 whilst she was out of power have been dismissed by the courts, 37 cases remain lodged against Khaleda Zia, the opposition leader. And of course there has been the Awami League government's various actions since 2011, including extra-judicial killings, disappearances and arbitrary arrests. which have sought to repress and weaken the opposition political parties. 

However, current government repression of the opposition does not necessarily mean that the opposition leader, when she was in power, was herself not corrupt. It is also important to note that FBI investigations have found corruption on the part of both her sons, Tareq Rahman and  Arafat "Koko" Rahman during the period when the BNP were both in power.

In the first section below, the basic facts of the current case are set out. In the second section, the prosecution allegations which have been accepted by the court are summarised And in the third section, there is an analysis of the prosecution case/conviction

1. Facts of the case

Below are the facts of the case. 

The original money
A. In June 1991, a bank account was established in the government Sonali Bank, named, "Prime Minister's Orphanage Fund." It was set up by Dr. Kamal Uddin Siddique, Khaleda Zia's principal secretary.

B. A sum of $1.25 million - equivalent to Tk. 44. 5 million - was placed in the account
Money unused for two years
C. In the two years period, between June 1991 to September 1993, none of the money was disbursed.
Establishment of a Private Trust
D. In September 1993 a Trust named the 'Zia Orphanage Trust', was established with Khaleda Zia's two sons Tarique Rahman and Mr. Arafat Rahman and Khaleda Zia's late husband Ziaur Rahman's sister's son, Mr. Mominur Rahman as its trustees. The address of the trust was the same address where Khaleda Zia resided at the time. Tarique Rahman was appointed as the settlor of the Trust. The account could be operated under the signature of Mr. Tareque Rahman and either one of the other two signatories

E. On November 13, 1993, the Prime Minister’s Office issued a cheque for Tk. 23 million (signed by Dr Kamal Siddique,) which was deposited in the Zia Orphanage Trust's bank account in Sonali Bank. 
(The remaining half of the money was put into a different Trust and is not relevant to this case)

Money continues to be unused for a further 13 years
F. For another 13 years, between 1993 to 2006, the money continued to be unused.

G. After accruing interest, by April 2006, the money was worth Tk33.7 million.
Money moved to Prime Bank
H. In the four months between April and July 2006, the trustees issued a total of six cheques, worth Tk 33 million depositing them into a number of different bank accounts which were opened in Prime Bank, a private bank.

- A total of Tk 23 million was placed in three separate bank accounts (Tk 10 million, Tk 8 million and TK 5 million) each named Zia Orphanage Trust

- Tk 10 million was placed in the account of Salimul Haque. Haque was a businessman, a BNP MP at the time, and chairman of Prime Bank itself.

New Authority given to operate bank accounts
I. The Trustees passed a resolution on March 28, 2006 which conferred authority on:
- someone called MS Rahman to operate two of the bank accounts in the name of the Zia Ophanage Trust with a total of Tk 13 million (Tk 5 million and Tk 8 million). These two accounts remain operative

- Salimul Haque to operate another two of the bank accounts - one which was in the name of Zia Orphanage Trust with a total of Tk 10 million, and the other account, which was held in his own name worth Tk10 million
More new accounts set up
J. In another resolution on October 15, 2006, the Trustees set up two new accounts in another branch within Prime Bank - one in the name of Gias Uddin Ahmed 
and another in the joint name of Salimul Haque and Syed Ahmed. 
K. Tk 10 million was moved from one of the existing Zia Orphanage accounts into Gias Uddin's account; and Tk 10 million was moved from the account of Salimul Haque into the new joint account of  Salimul Haque and Syed Ahmed. 
L. On February 7, 2007, the money was removed from the joint account of Salimul Haque and Syed Ahmed and  put into a new account in the sole name of Gias Uddin Ahmed. 
Money given to Shorfuddin Ahmed 
M. At this point, Gias Uddin controlled both accounts  In the form of six pay orders, Giasuddin then took the money out from the two accounts (which with interest now totalled Tk 21.07 million) and on March 28, 2007 deposited the money in the current account of Shorfuddin Ahmed which was located in the same bank. 

2. The prosecution allegation

Why does the prosecution/court consider that these facts amount to a crime? They argue that:
A. Khaleda Zia authorised the Tk. 44. 5 million to be deposited in June 1991 in the Sonali Bank account named the Prime Minister Orphanage Fund; 
B. The money was intended to be given to the government and was placed in a government bank account, the Prime Minister Orphanage Fund; 
C. Two years later, Khaleda Zia authorised Tk 23 million of the money to moved into a new bank account belonging to a private Trust called Zia Rahman Orphanage Trust whose Trustees were her two sons and nephew.

D. This transfer was illegal as the money was government money. This was the beginning of the process of embezzlement by Khaleda Zia.
E. Although Khaleda Zia was not a trustee, she continued to have authority over the Trust and what happened to the money; 
F. Khaleda Zia was involved in all the subsequent actions (set out in detail above) involving the trust including;
- moving the money to prime bank; 
- setting up new accounts in the names of various people
- moving the money between accounts
 which finally resulted in Tk22.1 million of the money transferring into the private account of Shorfuddin Ahmed.
G. The transfer of the money to Shorfuddin Ahmed was the culmination of the embezzlement
The defence argument

A. The money came from the Emir of Kuwait and the initial account in Sonali Bank was set up on the initiative of Mustafizur Rahman (the then Foreign Minister) and that Khaleda Zia did not sign any document relating to the opening of this account nor did she operate it. 

B. The account was in all intents and purposes a private account and the term "prime minister" in the account name referred to the person, not to the office of the Prime Minister. The defence have produced a letter - though this was not given to the court - that purports to come from the Kuwait embassy that states, that "the donation was given to the Zia Orphanage Trust". This is the name of the private trust set up in 1993. The defence argue that by implication the money was not meant to be given to the government but to this private Trust. 

C. There is no documentary evidence that in 1993 Khaleda Zia was involved in transferring the money from the Sonali Bank account to the bank account of the new Trust. 

D. Khaleda Zia was not a trustee of the Trust and had no authority over decisions made by the Trust, so she cannot be held responsible for what happened to the money between 1993 and 2007 

E. The Trust gave the money to Shofuddin as payment of land to be used for an Orphanage 

F. Shofuddin gave the money back to the Trust following an order of a court in unconnected proceedings.

3. Analysis

There would certainly seem legitimate reasons why investigators might be suspicions about this particular pot of money. 

First, in the seventeen years, between 1991 (when the money was first given) and 2008 (when the investigation into the case started) none of the money was used for the purposes for which is was provided, that is to assist Orphans. 

Secondly, in 2006 and 2007, the Trust set up a series of new accounts in different people names, moved the money around these accounts, and finally put Tk 21 million (out of the Tk 33 million) into an account belonging to a particular person - who took the money out.

Why, one could ask, would a private orphanage trust, if it was legitimate, not spend any of its money on orphans for 15 years? At the very least this is surely serious dereliction of duty on the part of those entrusted with the money, and in particular the Trustees who were given responsibility for it in the previous 15 years. 

And why would a legitimate private Trust set up a series of new bank accounts, some under different people's names, and transfer its money between them in the way that it did? 

There does seem something rather fishy about all this. 

However, it is one thing to say that there seems gross failure in the utilisation of money - which there clearly was - and quite another thing to argue that Khaleda Zia has committed a criminal offence of embezzlement.

The prosecution case against Khaleda can be divided into two parts; the allegation that government money was transferred to a private trust in 1993; and then the claim that some of the money in the private Trust was embezzled by Khaleda Zia through various account transfers that took place in 2006/7.

Government to private money?
Was the money given by the Kuwait Emir a donation to the government or a donation to a private trust? This is a crucial matter as the prosecution's whole argument is based around the claim that government money was illegally removed and transferred into a private Trust.

At first glance it may seem obvious that the Kuwait Emir's donation was given to the Bangladesh 'government ' since it was put into an account called "The Prime Minister's Orphanage Fund." However, this may not have been the intention of the the Kuwait Emir, since a letter from the country's embassy dated  August 11, 2015 states that "the donation was given to the Zia Orphanage Trust". 

The Zia Orphanage Trust was created two years after the Kuwaiti Emir gave the money - so the meaning of the letter is confusing. However it is certainly possible to read this letter as meaning that the Kuwait government had agreed in 1991 that the money would be put into a private Trust, known as The Zia Orphanage Trust, and not given to the government. If this is so, then the initial placing of the money into an account named The Prime Minister's Orphanage Fund may well have simply been a stop-gap measure, and was not meant to be government money. 

One does not know for certain what were the intentions of the Kuwait Government - and this is because the investigators never sought to inquire from whom the money came, yet alone what was the intention of the Kuwait Emir. 

Section 405 of the Penal Code, the offence for which the opposition leader has been convicted, requires evidence of "misappropriation". But if the Emir of Kuwait intended that the money would be placed in a private trust, there would be no misappropriation .

It is difficult to see how a prosecution of this kind could take place - of indeed how a court could have reached the conclusions it did - without the authorities first making these inquiries. 

Subsequent embezzlement
Was the money embezzled, and if so, was the money embezzled by Khaleda Zia?

The criminal court ruled, on the basis of the prosecution argument that, the embezzlement took place when Tk 21 million was transferred into the account of Shorfuddin Ahmed. It may well indeed be the case that this financial transfer was part of a criminal plan to steal the money - however the prosecution do not substantiate this claim very well. 
- it does not respond or engage at all with the defence argument that this money was part of a deal to buy property for the Orphanage. 
- it does not deal with the defence claim that because of a problem in the sale, and as a result of an unconnected court action, the money was apparently returned to the Trust account in 2007, before the investigation into the case started.

In addition, even if it can be proven that the money was transferred to Shorfuddin Ahmed's account in order to steal it - the prosecution provided no evidence that Khaleda Zia had any knowledge or involvement in any of the transfers that took place in 2006/7 and in particular the one to his account.

She was not a Trustee and the prosecution provided no evidence to support the contention that she was involved in making any decisions involving the Trust. 

It is true that one may have good reason to suspect that she could have had some influence over the decisions - the Trustees were Khaleda's two sons and her nephew, and the address of the Trust was also the family's home address where Khaleda also lived - but there is no direct evidence. The claim is supposition, and the prosecution/court do not engage with this lack of evidence simply stating as fact that Khaleda was part of the Trustee's decision-making process without provising any evidence.

This final argument would of course not exonerate the Trustees who did give clear authority about the transfer of the money to Shorfuddin Ahmed - but this would still first require the prosecution to clearly showi that the money given to the Emir was intended to be given to the government and not to a private trust also that the transfer to Shorfuddin Ahmed was not intended to be used for the purposes of buying property for the Orphanage.

There is no doubt that serious questions are raised about the use or lack of use of this fund of money - and at the very least the Emir of Kuwait should be furious at the failure of the BNP opposition family to spend the money. The failure itself to use the money for the purpose it was given does raise questions as to whether there were any criminal intentions on the part of the Trustees.

However, moving from suspicion to criminal prosecution is a different matter, and it is clear there have been significant weaknesses in the current prosecution case which raise questions about whether legal action against Khaleda Zia was at all justified.   A much stronger case could be made against the Trustees - but even then there needs to be much greater clarity how the final transfer to Shorfuddin Ahmed was an attempt at embezzlement. And the prosecution have not yet shown that.


Indeed, all in all, there is very little evidence linking Khaleda Zia to decisions involving the money from the Emir of Kuwait. In relation to the money going into the Prime Minister's Orphanage Fund in 1991, and then from the Fund to the Trust in 1993, there is no documentation supporting the claim that the movement of money was based on an instruction from Khaleda Zia. Indeed a number of civil servants present in the prime minister's office between 1991-3 confirmed this in oral testimony before the court. So for example, one stated, "Nowhere in the bank account, in the records received from the Prime Minister’s office and in the register of Prime Minister’s Orphanage Fund, there is a signature of Begum Khaleda Zia, nor is her name mentioned."

One assumes that the basis to the claim that Khaleda Zia was involved in these transfers of money is through implication - in that she must have been so involved as they were done by her private secretary. In addition there is testimony of one civil servant - which was in opposition to other evidence heard at the Trial - who said that, "The original file of the orphanage fund in its note sheet had the approval and signature of the Hon'ble Prime Minister."

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