A fiduciary relationship is held to a pinnacle between any parties to it, Colombo Telegraph is now in possession of reliable information where a leading bank has failed to uphold this basic good faith and trust to one of its customers failing in its duty to uphold that fiduciary relationship.
Hatton National Bank (HNB), manageress of the Kundasale branch together with her deputy and others have swindled money from one of its customers, Colombo Telegraph reliably learns. The mass fraudulent act amounting to approximately 30 million rupees have been swept under the carpet to ensure the reputation of the bank is not affected.
The more alarming factor that has surfaced is the bank’s failure to make the victim aware of the findings of the bank and proper action is taken. Several requests sent to the bank has fallen on deaf ears as it has not taken steps to be transparent with their victimized customer.
Speaking to Colombo Telegraph the victim, Vinothini Vijeyakumar, related her story explained how she was guided by the said manageress professionally to open an account with them which eventually increased to five accounts. The manageress has then offered to perform services going beyond her role and obtained signed cheques from the victim on the pretext of assisting her with the accounts during her confinement.
“As a reputed bank I fully trusted the bank and never even dreamt the bank will not only defraud me but simply wash off its responsibility by calling me upon several meetings and falsely convincing me that they would amicably come to a conclusion regarding this case for a year. Some of the officials treated me in a mocking manner even regretting about the fact that I’m a mother of three children and a victim of a massive fraudulent,” said Vinothini Vijeyakumar.
“I am currently going under deep mental agony as I’ve lost in the field of my business and in my crib level and I’m also in a catastrophic state of losing all my good will due to the degrading activities of such a reputed bank. I further state that my recycling project has also faced a downfall due to such false activities of the bank and it will completely breakdown once after the auction,” the victim Vijeyakumar further said.
The bank with a malicious intent deliberately averted the auditors by impeding their audit activities.
The bank has fabricated a letter for a fund transfer of Rs.2 850 000 and the date mentioned in the letter is 07.06.2015 but the account was opened in March 2016. ( click here to read fabricated letter)
When suspicious arose, immediate steps were taken to freeze the bank accounts and conduct a forensic audit. In their executive summary KPMG, auditors state that “Identified loss was approximately Rs. 22 million. This figure includes the gap between withdrawals and deposits Rs. 18.2 million and a cash withdrawal of Rs. 3.9 million”.
The executive audit report further indicates that it was revealed that there was an Rs. 3.9 million cash withdrawal without a corresponding cheque reference in March 2016.
“Even though, there had been a typed letter with the account holder’s signature as a supporting document for the Rs. 3.9 Mn cash withdrawal, the account holder has not granted approval for this withdrawal. Therefore, Rs. 3.9 Mn cash withdrawal has added in arriving the possible total loss,” the report states.
In addition other fraudulent activities identified through the audit includes unauthorized fund transfers, Unauthorized Overdraft Facility, Unrealized deposits, where the deposit slip with HNB official stamp was not deposited on the respective account, cheque deposits recorded as cash deposit – System status report has printed on the cheque deposit slip as a “Cash Deposit” and Withdrawal of Rs.50,000 even after freezing the accounts on the 30th of June 2017.
Other than conducting an internal inquiry the bank has failed to take any action against the ex-employees or to assist the victim in recovering the loss. However, the bank is now pursuing to auction mortgage property in order to recover. But by terminating both the manageress and the assistant the bank has not only accepted the full responsibility of the fraud, but taken the onus of providing relief to the customer as a matter of assuring “credibility” and trustworthiness and reputation of the bank. (Click here to read the letter of termination)
The complaints to the financial ombudsmen or the Central Bank over the matter have not done much to bring about any justice.
The victim currently faces financial losses and the risk of losing assets over the bank’s attempt to auction it and no redress is made to recover the moneys.
On 11th March Colombo Telegraph has sent following questions to the administration of the HNB and even wrote to the Chairman Dinesh Weerakkody seeking clarification:
1. When did the Complainant Vinothini make the Complaint to the bank?
2. Vinothini being one of the main customer and one who was holding almost 50% of the turnover at Kundasale Branch of the HNB, dealt in Millions in your Kundasale branch complains of a massive fraud –what are the actions the Bank has taken on justice to this valued Customer ?
3. This complaint warrants an internal audit and a high level investigation, what is the status of such audit and investigation ?
4. Did you support and allow Vinothini to get a proper audit done on her bank account-which she was entitled to?
5. You have informed the Central bank that the relevant – Kundasale Manager and the Assistant Manager had been terminated from service – is it not an indication that the bank had taken responsibility and culpability in this regard?
6. Vinothini’s Eco friendly business had been an asset to the National Economy. The fraud, breach of trust has caused irreparable loss to her business, loss of employment to hundreds of people, loss to the National economy, unbearable mental agony to Vinothini. Did you deal with this matter firstly according to business ethics? Secondly on the grounds ethical customer care and thirdly on humanitarian grounds?
The bank has so far failed to answer to the questions above.