March 18, 2007	Sunday	Safar 28, 1428

DHAKA, March 17: Bangladesh real estate companies warned on Saturday they face financial ruin following a government corruption crackdown on new apartment owners. A military-backed government came to power vowing to wage an all-out fight against widespread graft and clean up the country's murky political scene before staging parliamentary elections.

As a result, authorities in late January started targeting property owners, demanding transaction records from real estate agencies in an attempt to determine if their finances were from legitimate sources.

“Security forces came to our offices and building sites. They demanded names of owners of all the flats we sold in the last five years,” said Abdul Awal, president of Real Estate and Housing Association of Bangladesh.

“It has created panic among clients. No client wants to buy flats for fear of being asked about the source of his money,” he said.

“It's a disaster for us,” he said.

Dwellings are traditionally partly paid for in Bangladesh with “black” undeclared money which means the registered prices of the properties are lower than the actual market value.

Sometimes the black component of a transaction can go up to 90 per cent.

The association said initially the crackdown had hit luxury flat sales because the country's rich people were afraid to make any financial deals.

But now even ordinary buyers are panicking because they think buying a flat will land them in trouble, said Toufiq M. Seraj, chief executive officer of leading real estate company Sheltech.

Consequently, REHAB said the construction sector, employing more than one million people, was facing a sharp slowdown, affecting allied industries such as cement, rod, ceramic and construction materials.

The construction industry accounts for nine per cent of gross domestic product and has been growing by over eight per cent annually since 1999.—AFP