Despite a history riddled with financial scandals, Mohammad Obaidul Karim, chairman of Orion Group, has repeatedly evaded legal repercussions, securing a “clean chit” from the court over billions in defaulted loans.

Documents obtained by The Mirror Asia reveal that Orion Group's total loan burden stands at over Tk 15,000 crore, including almost Tk 1,000 crore in defaulted loans and additional non-funded liabilities such as letters of credit and bank guarantees amounting to thousands of crores. For decades, Obaidul Karim has been at the centre of significant financial misconducts, including the infamous Oriental Bank (now ICB Islamic Bank) scam and manipulations in the share market. 

Despite his notorious past, Obaidul Karim continues to thrive financially through dubious means, bolstered by his influential political connections. His brother, Mohammad Ebadul Karim, controversially secured a parliamentary seat in 2018 under the banner of the ruling Awami League, further entrenching the Obaidul Karim family's political clout.

When contacted, representatives from Orion Group did not respond to phone calls, emails, and text messages.

Mechanisms of Wealth Accumulation

Orion Group operates 124 subsidiaries, of which only 22 remain active. Through these subsidiaries, Karim has borrowed astronomical sums from various financial institutions, often without proper documentation or collateral. For instance, Belhasa Accom and Associates Ltd borrowed Tk 166.30 crore from banks using five accounts, but its Taxpayer Identification Number (TIN) could not be traced. In 2010, UAE-based Belhasa Engineering & Construction Company sued Belhasa Accom and Associates Ltd for defrauding its name in the Gulistan-Jatrabari flyover project.

Another subsidiary, Digital Power & Associates Ltd, holds a debt of over Tk 426 crore, borrowed through eight accounts from six different banks. Of this figure, nearly Tk 1.5 crore turned into defaulted loans, and additional non-funded liabilities worth Tk 13.4 crore remained unpaid.

Obaidul Karim’s modus operandi follows a similar pattern. It includes securing massive loans, defaulting on repayments, and subsequently leveraging political influence to evade legal consequences. For example, Amar Desh Publications Ltd, a company sponsored by Obaidul Karim, defaulted on Tk 12.61 crore out of a total loan of over Tk 51 crore. A High Court bench stayed the Bangladesh Bank’s plea to list Obaidul Karim as a loan defaulter, effectively shielding him from legal accountability.

Similarly, Kohinoor Chemical Company Ltd’s loans stood at over Tk 62.33 crore. The loan was taken using 44 accounts from eight financial institutions and banks. Of this amount, over Tk 12.73 crore was unpaid for bank instalments, and liabilities of about Tk 50 crore were not paid as non-funded guarantees. Ebadul Karim is the Director of this subsidiary. Bangladesh Bank included Obaidul Karim and other directors as defaulters for non-payment of these loans. However, his name was dropped from the list of defaulters following a writ petition in the High Court.

Orion Pharma Ltd borrowed over Tk 2,228 crore through 107 accounts from 12 financial institutions. Of this, more than Tk 128 crore defaulted, over Tk 101 crore became substandard loans, and Tk 50 crore turned into bad loans. Additionally, the company owes more than Tk 255 crore in bank guarantees and Tk 150 crore in LC payments to banks.

Subsidiaries like Orion Power Ltd, Orion Oil and Shipping Ltd, Dutch Bangla Power & Associates Ltd, Orion Agro Products Ltd, Orion Footwear Ltd, Orion Gas Ltd, Orion Home Appliances Ltd, Orion Infrastructure Ltd, Orion Knit Textile Ltd, Orion Power Rupsha Ltd, and Orion Tea Company collectively owe over Tk 7,700 crore, with substantial portions of these loans defaulted. Yet, legal interventions and writ petitions have repeatedly removed Karim’s name from defaulters' lists, allowing his operations to continue unimpeded.

Unending Greed

His relentless pursuit of wealth appears boundless. On May 6, Orion Group, under the name of Orion Renewables Munshiganj Ltd, applied for loans worth Tk 1,633.41 crore from the state-owned Rupali Bank, according to central bank sources. To secure the loan, the company inflated the asset value to Tk 540 crore, despite the current market price being only Tk 180 crore, a source revealed.

Systemic Failures and Unchecked Influence

Transparency International Bangladesh's Executive Director, Iftekharuzzaman, highlights systemic failures in the banking sector that enable such financial misconduct. “Big industrial groups are exploiting legal loopholes and rescheduling loans through High Court petitions. The banking sector is effectively controlled by defaulters, who exert undue influence over regulatory bodies,” he said.

Former Bangladesh Bank Governor, Dr. Mohammed Farashuddin, also pointed out discrepancies in loan repayment policies, where good borrowers pay 10% interest while defaulters benefit from a mere 2% interest rate. This inequity exacerbates the financial strain on the banking sector, leading to reduced liquidity and hampered economic growth, he said.

According to him, in the first quarter of this year, Tk 36 crore of new loans have been defaulted. As a result, the usual circulation of money within the banking sector has stalled, leading to a lack of new investments and a struggling capital market.

“There is no money in the bank. This is a big problem. Bangladesh Bank renewed its non-performing loans law for one year a week before the January 7 elections. Additionally, parliament passed a bill to extend bank directors' tenure from nine to twelve years. I don't want to comment on any loan defaulters because those who were identified as top defaulters by Bangladesh Bank in 1996 are now very powerful,” Dr. Farashuddin remarked.

Timeline of Legal Battles

Obaidul Karim’s legal troubles date back to 2008 when he was sentenced to 13 years' imprisonment for amassing wealth illegally and concealing asset information. The same year, he received a five-year sentence for money laundering related to the Oriental Bank scam. In 2007, another special court sentenced him to life imprisonment in an embezzlement case. Despite these convictions, Obaidul Karim has managed to evade imprisonment, continuing to engage in large-scale financial deals and share market manipulations.

The case of Obaidul Karim exemplifies the challenges faced by Bangladesh's financial and judicial systems in holding powerful oligarchs accountable. His continued evasion of legal repercussions underscores a broader issue of corruption and political influence that hinders the country's economic and social progress.

For now, Obaidul Karim, who also owns The Business Standard, a daily newspaper, remains a free man, his wealth and influence seemingly untouchable, while the repercussions of his actions ripple through Bangladesh's banking sector and beyond.