Another Platform To Plunder?

Another platform to ensure ease in credit access
Reminds one the scams from e-commerce mess.

I have taken particular interest on two news reports last week.

One was on troubled e-commerce platform, evaly,which created consternation after it had failed to meet client’s demand by running a fraudulent business model. Evaly scam shocked the nation and the whole e-commerce industry came under scanner.Many clients await for refund . Recently, High Court has instructed the Management Board to use frozen bank accounts of CEO of evaly to meet operational expenses of the company. In addition, it ordered to sell vehicles under evaly's possession. High Court had earlier given a stay order not to sell evaly's seized property. The revised decision came during an appeal hearing¹.

Another news report divulged that Bangladesh Bank awarded third party to operate a platform that would disburse credit to micro,small and medium entrepreneurs after securing purchase guarantee from a customer². The initiative appears to be a novel one. However, if we take a look at earlier incidents there is little room for optimism that it will bring some positive change.

In the recent e-commerce scam, 41 cases had been filed against 15 platforms. Police is still in the dark about the amount of money stuck in such platforms³.

When evaly first started its journey it did not disclose details about it. Likewise, we know little about the new platform floated by the Bangladesh Bank.Whatever the intention of the platform is, such silence raises suspicion.

Prior to 2009,there was a practice in the corporate world to publish details about the corporation including audit reports. Site maps included a lot of information about the corporation.That practice in the course of time withered away. Less transparent manner in doing business only gives rise to fraudulent practices.

Highest number of cases filed (10) against e-orange,where an inspector have stakes. This gives an indication how corrupt practices even reached the law-enforcement agencies. The inspector was detained in India while trying to reach Nepal.

RAB,the agency that detained evaly owners,even requested the troubled evaly to sponsor the film “Operation Sunderbans” amid central bank's investigation of the platform.

The point is a criminalized law-enforcement system cannot guarantee transparent and clean business environment.

While addressing a gathering of police officers, even IGP called his colleagues not to fall for lures of dazzling discounts offered by e-commerce platforms.

The evaly incident revealed many suspicious transactions: order of truckload of soybean oil,multiple accounts of one client etc. Even many victims protested arrest of owners of evaly!

As the news reports keep telling to disburse the fund among victims, many argued that victims of MLM companies like Destiny,Jubok etc have not received yet their money. What a logic!Even minister of Commerce and minister of Finance locked in such arguments.

This kind of retributive behavior is pretty prevalent during the cultural revolution or in the nomadic societies in the Middle East.I wonder how the government is going to implement digital Bangladesh in this society.

Despite all the guarantees and safety clauses,one cannot rule out that the customers in connivance with sellers may act to legitimize undocumented wealth using Bangladesh Bank’s novel initiative. The less transparent environment in business only raises likelihood of it.

Notes And References:

1 “Evaly'r Gari Bikrir Onumoti Pelo Porshod(Management Board Got Permission To Sell evaly Cars)”,Daily Prothom Alo,January 17,2022.

2 “MSME Ke Orthayone Bishesh Platform(Special Platform To Finance MSME)”,Daily Prothom Alo,January 19,2022.

3 “Todonto Gotiheen,Grahokera Hotash(No Pace In Investigation, Customers Are Frustrated) “,Daily Prothom Alo,January 19,2022.

La Semaine Dernière A Mes Yeux

(22 octobre --- 29 octobre)

Selon un reportage, un ferry plein de 17 véhicules et 100 passagers a fait chavirer à Paturia,Manikganj.

Selon un reportage, presque 85 plaintes ont été déposées contre 24000 personnes dans les incidents de vandalisme au milieu de Durga Puja à travers du pays.

Selon un reportage, violence dans les élections municipales a tué 2 personnes et laissé 52 blessées dans 8 villes.

La Semaine Dernière A Mes Yeux

(10 septembre --- 17 septembre)

Selon un reportage, la force élite a appréhendé PDG d'un plateforme de cybermarché pour avoir escroqué milliards de Taka des consommateurs. Sa femme,une salariée de la société problématique,a été aussi arrêtée.

Selon un reportage, le bureau de renseignement financier de la Banque Centrale a demandé info sur les comptes bancaires des dirigeants de syndicat de journaliste.

Selon un reportage, la Cour d’appel a ordonné de terminer l’opération de site de nouvelles qui ne possèdent pas permis valable.

E-commerce Industry Under Scanner

Another e-commerce company in trouble,
Image of the industry is reduced into rubble.
No honor for gentleman’s agreement,
Hardly brings any foreign investment.

Bangladesh’s e-commerce once again is marred by scam. Another e-commerce platform eorange is on the brink of bankruptcy after consumers filed complaints of Tk 11 billion embezzlement.The owners and officials of the platform had appeared before the court for bail but the court sent them to jail.Angry and deceived clients formed human chain in front of the press club and even blamed an inspector of Banani Police station as he is brother of the owner of eorange¹.

Authorities are already dealing with the complaints of evaly,which does not have enough resources to meet the orders of its clients and clear the bills of its vendors. Its Ponzi-like business model is even rebuked by association of e-commerce platforms.The association disclosed to an online news platform that it would revoke membership of 8/9 platforms out of 19 platforms operating in the country at this moment². This captures the anarchy going on in this sector.The head of Department of Consumer Rights Protection admitted to the online news platform that highest number of complaints was lodged against evaly(4932),followed by eorange².Unlike the two,complaints against other platforms are resolved quickly.

According to Statista,size of Bangladesh’s e-commerce market will become $1.95 billion by the end of this year³.

Evaly scam already shook the industry and eroded consumer trust on such platforms. Bangladesh Bank did a probe and unearthed that evaly had taken advance payments of Tk 213.94 crore from consumers and failed to meet the orders and it owed Tk 189.85 crore from vendors as of March 14,2021⁴.

Following an instruction from Ministry of Commerce,evaly disclosed its total equity and liability is Tk 5.44 billion, of which current plus tangible asset is Tk 1.05 billion and total liability is Tk 4.38 billion⁴.

Many Mobile Financial Services(MFS) stopped providing services to evaly,eorange and others alarmed by too many complaints and due bills⁵. Most of the troubled e-commerce platforms took money in advance from the clients,gave eye-dazzling discounts and then just shrank in the face of overwhelming demands.

It turns out from the online news portal's report that many clients opened multiple accounts to take advantage of huge cash discounts². Back in last year, I wrote a piece titled “Ponzi or E-commerce”  on https://rezaulhoque.WordPress.com to discuss true motive of such platforms.Many compared their operations with multilevel marketing company or running a Ponzi scheme. In the past,such companies ruined millions of people and owners of the companies are serving prison terms or fled abroad.

In our country, surveillance on the misuse of public fund is not adequate. Even automation at public enterprise is delayed to let continue such misuse. Back in September 2019, I wrote a piece where I highlighted the repercussions for holding long such money from public system by citing a news report on delay in launching the planned automated payment system of Bangladesh Petroleum Corporation(BPC). BPC is country’s biggest company with annual turnover of TK 500 billion. The planned automation is supposed to cut the payment time to 4 days from 10 months. BPC faced stiff resistance from a certain quarter that does not want to see BPC receives revenues from its oil sales from state-run petroleum products marketing and distribution companies in such a short span of time^{7 8}.

If payments take as long as 10 months to reach BPC coffer, then it is pretty understandable that those who benefited from this delay will leave no stone unturned to strew the road to automation with all kinds of hurdles. Holding BPC’s payments for 10 months , they can invest it to somewhere else and make lots of money. Frankly speaking, they can open 3-month or 6-month-long deposits at banks and earn huge interests. Or they can erect a whole new multi-storey building at any part of Bangladesh. In addition, such time lag also raises the possibility of leakages in the system. A news report revealed that a local company already developed the payment software, but it could not proceed with the scheduled launching due to the resistance from this vested quarter.

By the same token it will not be an exaggeration to insinuate that clients’ money of this upstart company may be misused as it is shy to disclose its details and to advertise widely its services⁶.

It is indeed interesting and puzzling the meteoric growth of these e-commerce platforms.Over the past few years, unemployment rate, cost of living increased and salary in real terms decreased. Pandemic brought to fore a great deal of uncertainty about the future.Meanwhile, there has been few ads of consumer loans offered by the banks.All the sectors except real estate are battered by Corona. Provision of legalizing black money tremendously helped the real estate sector.While consumers hold back their expenses,why is there a buying spree on online e-commerce platforms? There may be something fishy going on here. Government also opened the IT sector as a possible destination of melting the black money. Except evaly,which managed to bag an investment offer of Tk 2 billion from Jamuna Group,no other companies attract such investment. Consumer online commands and outstanding liabilities also raised the suspicion as this money managed to get into the balance sheet.No matter which side of the balance sheet it stays,this money is pretty much in the mainstream now. One knows evaly has to pay Tk 438 crore. It is like valuation of damaged goods in the burning warehouse, a sum like say Tk300 crore(this was exactly what happened in the case of destroyed lighting equipments of a construction company ,renovating the Intercontinental Hotel,in a fire accident in Jessore few years ago).Fate of Tk 300 crore or Tk 438 crore is sealed.

Another thing I noticed that such platforms and covered van service providers do not keep track the weight of goods they are carrying.But the courier companies and postal service record the weight of consignment. Most of the platforms have their own delivery services,may be that’s why they do not keep track of weights. I think regulator authority should make it mandatory for delivery providers to keep records of identity of the good and its weight.

Our financial sector is in limbo partly because of the weird regulations authority introduced and nepotism in the management board. Now we are witnessing it in the e-commerce sector.Clandestine wealth has corrosive effect. It should not be allowed to melt in IT sector. Rumor has it that many platforms expect foreign investment in this sector. In a country where gentleman’s agreement is violated on every occasion and one is judged by his ability to do harm such foreign investment may remain out of reach. Who will come to “Anarchistan”?

Notes And References:

1 “1100 Koti Atmasater Obhijog(Complaint Of Tk 11 Billion Embezzlement)”, Daily Prothom Alo,August 18,2021.

2 “E-Commerce: Ponno Kenar Hiriker Por Ekhon Obhijoger Pahar(E-commerce: Complaint Deluges After Buying Spree)”,Faisal Atik,bdnews24.com,August 19,2021.Link here

3 “E-commerce: Bochhor Sheshe Akar Darabe 16000 Koti Take(E-commerce: A Tk160 Billion Market By The End Of This Year)”,Daily Prothom All,August 08,2021.

4 “Evaly’s Actual Debt Higher Than BB’s Findings”,Abul Kashem,Business Standard,August 19,2021.Link here

5 “Evaly,AleshaMart shoho 10 E-commerce e Lenden Bondho Bikshe(bKash Stops Transaction With evaly,aleshamart and 10 Other e-commerce Platforms) “,bdnews24.com,July 17,2021Link here

6 “Ponzi Or E-commerce?”,Rezaul Hoque,September 09,2020.https://rezaulhoque.WordPress.com.Link here

7 “A Campaign Far From Complete Success”,Rezaul Hoque,September 26,2019 Link here

8 “BPC's ‘Payment Automation' Launch Hits Snag”,Financial Express, June 24,2019.Link here

La Semaine Dernière A Mes Yeux

(09 juillet --- 16 juillet)