Allegations have been raised against the executive chairman of the Board of Investment (BoI), Mahmudur Rahman, a high profile government functionary, that he continues to receive huge financial

benefits from Shinepukur Ceramics, even two years after he had left the company as its managing director and chief executive officer.

Reliable sources have come up with documents to prove that the company still bears Mahmudur Rahman's various expenses includ-

ing his expenses on credit card, cellphone and utility bills and even house rents.

But the most controversial allegation is that Shinepukur Ceramics still transfers Tk 5 lakh every month to his account at IFIC bank. Sources said this amount he receives in salary.

According to a source, the Prime Minister's Office (PMO) has recently come to know about Mahmudur Rahman's financial links. The BoI is directly under the PMO.

It has also been known that a business quarter involved in the 1996 share market scam are lobbying for Mahmudur Rahman to put him in Securities and Exchange Commission as its head.

Mahmudur Rahman and his former employer and Vice-chairman of Beximco Salman F Rahman have their own explanations that have discrepancies.

The Daily Star talked to the BoI chief in details about all the allegations and to Salman to know his version.

What is intriguing is whatever money Mahmudur Rahman received at his IFIC account -- most of them in deposits of above Tk 5 lakh -- was all in cash and seldom, if ever, by cheques.

Moreover, his account statements show that during the last nine months this year, he received as much as Tk 25 lakh in a single instalment and as much as Tk 35 lakh in a month.

If these allegations stand true, Mahmudur Rahman's joining the BoI in October 2001 and his alleged financial links with his previous employer, Shinepukur, raise serious questions of unethical practice, violation of government service rules and conflicts of interest.

A rough and partial estimate of what Mahmudur Rahman is alleged to have received from Shinepukur from November 2001 to September 2003 runs into over Tk 86.58 lakh. This includes 15.40 lakh in house rent from November 2001 to August this year, Tk 93,742 in car maintenance in May, June and September of this year alone, Tk 5,380 in landline and cellphone bills for June and September this year, Tk 14,500 in electricity bills for May, June and July this year, and Tk 70 lakh which was transferred between January 2003 and September 2003 in monthly instalments of Tk 5 lakh.

Competent sources also allege that the ceramics company has transferred two of its vehicles to the BoI chief and is paying for all repairs and maintenance of the cars and salary of two drivers. One of the vehicles is a Nissan Petrol and another a Honda Accord valued well over Tk 50 lakh. Salman F Rahman also admitted to all this.

The Daily Star has learnt from Pacific Motors and DHS Motors that Shinepukur recently paid the bills for repairs of three of Mahmudur Rahman's cars.

While holding the post of the BoI chief, Mahmudur Rahman is still alleged to have been issuing office memos for Shinepukur and frequently visiting the factory and advising its staff. Sources say that Mahmudur Rahman still performs most of the functions of MD, as evident from memos he is alleged to have signed.

This immediately raises questions if he has been playing a dual role, almost holding two offices simultaneously and if so, in utter violation of government service rules. And incidentally, Shinepukur has not appointed any MD since he left for BoI.

Allegations are there that Shinepukur Ceramics paid the monthly rent of Tk 70,000 for Mahmudur Rahman's house at Baridhara for the last two years where he stayed till August 2003 before moving to his apartment in Gulshan. And again, if such allegations are true, then it means the BoI chief had been simultaneously getting house rent from the government as well as his previous employer.

How and why Mahmudur Rahman gets Tk 5 lakh from Shinepukur every month is still shrouded in mystery as the parties concerned have explained the deal in different ways which contradict with what The Daily Star sources claim.

The BoI chief said at the time of severing ties with Shinepukur, the company owed him Tk 75 lakh. This he has been receiving in monthly instalments, he claimed.

But his 'former' employer Salman F Rahman has his own version of the story.

"The company preferred to negotiate the compensation package under which the payments will be made in instalments to reduce financial burden on the company," Salman said. "Under the terms, we agreed to settle various expenses of Mahmudur Rahman and adjust it with the total amount."

Salman said Mahmudur Rahman is a shareholder of the company and the company still owes a lot more than the amount he has received from the company.

He said Mahmudur Rahman wanted the company to buyback his holding in the company and therefore is expected to receive a lot of money.

Salman said: "According to an agreement with Mahmudur Rahman, whatever money we spend on settling his expenses against credit card, car maintenance and house rents, will be offset from the total amount which we still owe him."

He however did not comment on the 'ethical aspect' of such a deal when the person in question has joined a government job.

Mahmudur Rahman has a rather feeble answer to back his using Shinepukur cars and said the company gave him the vehicles "in recognition of his service", but denied his drivers being under the payroll of Shinepukur.

He also denied that the ceramic company was paying for his credit card, mobile, utility bills, travel expenses or the house rents.

About Mahmudur Rahman's alleged rendering service to Shinepukur even after he joined the BoI, Salman has given an explanation that reveals the real nature of his former employee's links with Shinepukur.

He said it was difficult for the company to release Mahmudur Rahman when he opted for the BoI job, but he was let go on the condition that he would be available to support the company in case of "technical difficulties".

Any technical assistance rendered by the BoI chief during his stint with the government job however does not entail any monetary transaction, Salman said. Sources close to Shinepukur and Mahmudur Rahman say that the former MD has not given up his role in the company.

Mahmudur said the rent and bills were paid by Shinepukur also in recognition of his service to the company.

"It is nothing unusual. When you work for a company for such a long time, they let you stay in the company house for a certain period of time," Mahmudur said.

Controversy also rages over Mahmudur's farmhouse in Savar near the Shinepukur factory spread over an area of around 11 Bigha. Sources claim Shinepukur pays for the upkeep, maintenance and security, an allegation also denied by the BoI chief. Salman also denied that Shinepukur Ceramics was paying for the travel and overseas expenses of the BoI chief.

When pointed out that on a number of occasions, Bex Trade, a sister concern of Beximco issued tickets to BoI chief, Salman Raman said Bex Trade had sold the tickets as a travel agent to a client who probably found the rates better.

The allegations against Mahmudur has now put the critically important office of the BoI in questions because investment and specially foreign investment depend largely on the transparency of this agency. And when questions rise against the head of such an office, these need to be scrutinised and clarified by the government, observers feel.

If these allegations are true, then the investors, specially the foreign ones, may lose confidence in the crucially important office dealing with the whole gamut of foreign investment, say the business people.

The allegations, if proven correct, raises some critical ethical questions:

Can such a pivotal employee, leading an important public body of the government, maintain such financial links with a private company?

Was the government aware of these links? If so, how much of the link? If the government knew of the links, then how ethical was it for the government to permit such a deal?

Is not there a conflict of interest between the position of the BoI chief and being in the payroll of a private company that may have its own dealings with BoI?

How can other investors feel confident of a level playing field when the BoI chief has financial links with a private company?

The huge amount of cash payment to Mahmudur Rahman raises questions about tax and related issues. Does the NBR know about these payments?