August 9, 2002	Friday	Jamadi-ul-Awwal 29,1423

DHAKA, Aug 8: A corruption case has been filed by the Bureau of Anti-Corruption (BAC) against former Bangladesh Prime Minister Sheikh Hasina and four others on charges of graft in the purchase of a naval frigate.

They were accused of buying a naval frigate from South Korea with an “unproven design” at an inflated price of 99.97 million dollars after rejecting the lowest offer of 68 million dollars by a Chinese firm.

The BAC accused them of buying the frigate from South Korea’s Daewoo Company at a higher price in violation of the conditions of the purchase tender.

“This led to a loss of Tk 4.47 billion (99.97 million dollars), which is tantamount to criminal misappropriation of fund,” the BAC announced.

The other co-accused are retired navy chief Rear Admiral M. Nurul Islam, two retired commodores, A.K.M. Azad and Harunur Rashid, and a former president of the Federation of Bangladesh Chambers of Commerce and Industry.

Earlier this year, Sheikh Hasina along with a former air force chief and a few other top defence officials were also implicated in the purchase of eight Mig-29s.

The Bangladesh government had floated a tender in 1995-96 for the purchase of a frigate. Six companies submitted offers and the bid from a Chinese company, CSTC, was the lowest.

It offered its frigate model F22B being used by the Chinese navy. However, the tender committee scraped them without showing any reason.

Another tender, floated in 1996-97, sought proposals on frigates with “proven design”.

Nine firms submitted offers and again the Chinese company’s proposal was the lowest _ at 68 million dollars.

South Korean Daewoo’s submitted an offer of 93 million dollars with an “unproven” frigate design. The company’s shipyard had never built any frigate before.

According to media reports in Nov 1999, instead of choosing the lowest offer, the authorities decided to sign a contract with Daewoo and the tender committee entered into a follow-up negotiation with them.

Finally, the contract price went up to 99.97 million dollars from 93 million dollars. Media reports quoting a tender committee member said it was rather unusual because in the process of follow-up negotiations, the price always comes down.