What Does Nagad Ownership Row Reveal?

Row inside a public company
Reveals corruption of many.
Flaunting image of public property
Many made a fortune hefty.

Recently, a debate over the ownership of a leading Mobile Financial Service(MFS) operator has come to fore. Nagad has increasingly offered attractive rates through intensive promotional campaign since it began its journey in March 26,2019. It has been widely presented as a public-private venture between Department of Posts and a private firm. But a row between stakeholders divulged that Department of Posts did not consolidate fully its grip on Nagad. Despite having 51% ownership of Nagad,account that MFS maintains to convert digital money into actual money,known as trust cum settlement account, in commercial banks belongs to 49% owner of the company,Third Wave Technologies.

Recently, Third Wave Technologies changed the ownership of trust cum settlement accounts to the name of Nagad Limited.¹

As the row became public, Bangladesh Bank intervened and said from now onwards without consent of Bangladesh Bank and Department of Posts no new account would be allowed in Nagad.

Even the director general of the Department of Posts in a video message claimed that it awaited government’s nod to consolidate Bangladesh Post Office's ownership in the company.²

Recently, another e-Commerce company went into bankruptcy after the owners have embezzled Tk 1.1 billion. Many vendors and customers complained about their dues to the authority. When some of them had get back money or refund,Bangladesh Bank froze their Nagad account for indefinite period for verification and citing suspicious transaction. That was when this ownership debate popped up.

Despite being the majority owner of the company, Department of Posts cannot establish its control of the operations of the company. It is important to note that ownership of Nagad is based on a revenue sharing model.

Earlier another controversy of Nagad had come to fore when a foreign-based news site had revealed the owners of Nagad during its heyday. The names included staffs of Prime Minister’s office and influential ruling party leaders. Long before the news broke out,they all sold their shares sensing gravity of such revelation.

It is indeed a puzzling matter how part of a public service company is being used by others for their profit motive without giving the majority share owner its just dues.

It is not the first time that resources of a public company is used by a private one. A leading telephone operator took lease of Bangladesh Railway’s unused optical fiber network.

But this time controversy arose over ownership of this joint venture. There is no doubt that through the sale of shares previous share holders of Nagad gained a lot. Flaunting image of Bangladesh Post Office, they manipulated people’s trust.

As per Bangladesh Bank,there are 15 banks who are operating Mobile Financial Services in the country. Number of active users reached 4.09 crore at the end of June,2021. Average daily transaction rose to Tk 2,099.80 crore in June,2021. This signifies how important the MFS has become in vernacular lives of Bangladeshis.

Some mobile operators ,as many alleged, led their clients to subscribe Nagad services. Some denied it saying they had sought client’s consent through SMS.³

This thing has not become an issue unless some e-commerce platforms went into bankruptcy. Latest addition is the dhamaka which laundered Tk 116 crore abroad.Earlier,eorange had swindled Tk 1.1 billion and eValy had failed to meet merchant plus client’s obligations of Tk 411 crore. Many MFS companies,including Nagad, fell victim to deceiving acts and halted transactions of many accounts which failed to comply Bangladesh Bank regulations of suspicious transaction.

At this time Nagad ownership row surfaced on the media. It is a shame that many use public projects and company to make personal gains. In the name of self-financing the Padma bridge project, we witnessed how project cost has swelled over the years and a small group of people and government bodies pocketed huge amount of taxpayer’s money bypassing all alleys of accountability. Nagad ownership row is the latest addition to ongoing misuse of public company.

Notes And References:

1 “BB Bars Renaming Bank Accounts Of Nagad Without Its Approval”,New Age,September 06,2021Link here

2 “Nagad To Reopen Account After Transaction Scrutiny “,DS Sourav,Saddam Hossein,Meraj Mavis,Business Standard,September 08,2021 Link here

3 “Nagad,Robin Sign Deal On Financial Inclusion”,New Age,January 20,2021Link here