The e-commerce business in Bangladesh is expected to exceed US $ 3 billion in the next two years as per the President of the Bangladesh Association of Software and Information Services Syed Almas Kabir. And like any other sector, which is still in its initial days and yet to mature, Bangladesh e-commerce sector is also made to deal with its own share of irregularities and alleged malpractices, which led the Commerce Ministry to release the e-commerce guidelines prepared after consulting various ministries, Governmental and non-Governmental organisations, and other stakeholders concerned, aimed at bringing accountability to the sale of goods and services online, not so long back.
Pertaining to the same, Commerce Minister Tipu Munshi briefed reporters on various aspects of the guidelines over an online event reading out the key points of the guidelines — some of which are: Individuals or companies operating digital business must get trade licence, VAT registration, Tax Identification Number or TIN, unique business identification number or personal retail account, and show them on the website or social media; advance payments can be charged only for products that are in the country; all companies must appoint a compliance officer to handle the complaints filed by customers and he or she will coordinate with the DNCRP and settle the issues within 72 hours; a customer must be informed within 48 hours if a product or service cannot be delivered and the money must be refunded within 72 hours; if a company fails to deliver the product after taking advance payment, it must refund the customer within 10 days through the same mode of payment, and pay the charges for transactions, etc., — while adding for digital businesses to run smoothly, the Digital Commerce Management Guidelines were prepared.
The slew of measures as enlisted in the guideline aimed at streamlining the e-commerce business has now empowered the Government to crackdown on the errant entities, in which it is getting enough support from the judiciary and the central bank as well.
To start with, the Commerce Ministry first asked the Bangladesh Bank to provide information of 9 e-commerce companies, which are namely Alesha Mart, Dhamaka, E-orange, Sirajganj Shop, Aladiner Prodip, Qcoom, BoomBoom, Adyan Mart and Need.com.bd even as it wrote a letter to the central bank, in which the Ministry sought information on the total liabilities of the companies to the buyers and merchants and the amount of current and fixed capital of the companies.
It also sought to know whether the companies had transferred money elsewhere, as per Hafizur Rahman, Head of the Central Digital Commerce Cell of the Ministry, who added that there are allegations against these companies of not delivering goods after taking advance payment from the buyers and of not paying the arrears even after purchasing the goods from the merchants.
In this situation, the latest financial information of the companies has been sought from the Bangladesh Bank to determine the next course of action, he maintained even as after the issuance of the Government’s e-commerce guideline, Alesha Mart allegedly violated it by posting an advertisement on the company’s Facebook page, offering a 33 per cent discount to the buyers if they deposit the price in advance to the company’s own bank account, subsequent to which the Commerce Ministry forced the company to withdraw the offer just after it was posted.
Announcing a discount of up to 50 per cent at home and abroad, Alesha Mart was selling cards to customers taking an advance of around Taka 8,000 from each of them, which was against the e-commerce policy of the Commerce Ministry even as the Ministry officials verbally instructed the company’s owners to stop marketing of the cards, but the company allegedly did not pay heed to the same.
In the meanwhile, a senior Supreme Court counsel reportedly sent a legal notice to Government organisations and the Managing Director of Alesha Holdings urging them to stop the marketing of Alesha Card as it violates the country’s e-commerce policy and contradicts law and penal code.
According to media reports, Supreme Court Counsel Muhidul Kabir, in the legal notice sent on 21st August to the Secretary of the Information Ministry, the Managing Director of Alesha Holdings Limited, Joint Stock Registrar of the Commerce Ministry and the Secretary-General of e-Cab as defendants underlined that if no action was taken within four days of receiving the notification, a writ petition will be filed with the High Court, seeking legal remedy.
Meanwhile, another e-commerce platform Evaly has also been accused of not delivering the product after taking money from customers in advance even as Bangladesh Bank has collected information of 10 bank accounts of the company during inspection and, on 14 March, the amount of cash in those accounts was only Taka 2 crore even as until 15 July, the total liabilities of E-valy, including advances taken from customers, debts to suppliers and other business debts, amounted to Taka 543 crore. However, according to the company’s liability statement submitted to the Commerce Ministry, which sought the same from the company concerned, the total value of its movable and immovable assets is worth Taka 121 crore and excluding all movable and immovable assets of Evaly from its total debt, the deficit stands at more than Taka 422 crore, which in other words means, if all the movable and immovable assets of the company are sold, the company would be able to pay only 22.30 per cent of its debts to the customers and merchants.
Close on heels of the same, Evaly Managing Director Mohammad Rassel and his wife Shamima Nasrin, Chairperson of the e-commerce platform, have been sued for fraud and harassment even as plaintiff Mohammad Raj lodged the case with the court of Senior Judicial Magistrate Jasmine Ara.
Taking the case into cognisance in light of Raj’s statement and relevant documents, the court has directed the Police Bureau of Investigation (PBI) to submit a report after investigating the allegations, as per the plaintiff’s counsel Advocate Manjurul Islam Sohag even as Mohammad Raj said in his statement that he was yet to receive the products he ordered three months ago, which went against the company’s own policy of delivering all products within 45 working days.
The Commerce Ministry on its part had already asked consumers to file cases with the Directorate of National Consumer Rights Protection (DNCRP) who have not issued refunds while a nine-member inter-ministerial committee, headed by Commerce Secretary Tapan Kanti Ghosh and representatives from the Home Ministry, ICT Division, Bangladesh Bank, National Board of Revenue (NBR), DNCRP, and the Bangladesh Competition Commission, took the decision to protect consumers and the e-commerce sector even as following central bank’s earlier report, the Ministry of Commerce had asked the Ministry of Home Affairs to file a case against Evaly over the alleged embezzlement of Taka 338 crore taken as an advance from customers while several banks, including BRAC Bank, Bank Asia, Dhaka Bank, City Bank, Mutual Trust Bank, and Prime Bank have already suspended their transactions with Evaly.
The Commerce Ministry also wrote to the Anti-Corruption Commission (ACC) to initiate relevant legal actions against the online marketplace over the reported irregularities.
In a separate development, two cases over money embezzlement have been filed against another e-commerce platform eorange even as law enforcers have reportedly found two bank accounts of the said entity having only Taka 3,12,14,356 even as a bank statement of the City Bank showed that a total of Taka 620,67,20,729 was deposited in the account of the e-commerce platform until 20 July, but Taka 620,44,71,992 has already been withdrawn from the bank account now having only Taka 22,48,737.
Subsequently, two cases over money embezzlement have been filed with Gulshan and Tejgaon police stations against the company even as on 17 August, a Dhaka court sent eorange’s owner Sonia Mehjabin and her husband Masukur Rahman to jail while the Commerce Ministry in a notice to eorange asked it to explain harassment of customers, adding, it had learnt from several customers and the media that eorange did not deliver products on time even after receiving payments from customers, which is a violation of the Customer Rights Protection Act 2009 and the Penal Code 1860 while also seeking information about the assets and liabilities of the digital marketplace.
Later, the VAT intelligence has filed a case against eorange on the allegation of evasion of value-added tax (VAT). As per a press release of VAT Audit, Intelligence & Investigation Directorate (VATAIID) under the National Board of Revenue (NBR), the case was filed under the VAT and Supplementary Duty Act today, while earlier, a team of VATAIID conducted the drive at eorange office in Gulshan on 8 June and found evidence of VAT evasion of Taka 13 lakh, it said, adding the company bought products or services worth Taka 245.75 crore in a certain period and earned a commission of Taka 3.88 crore by selling those at Taka 249.63 crore, even as eorange was supposed to pay VAT of Taka 19.39 lakh at the rate of 5 per cent on the commission, but it had paid only Taka 6.23 lakh and hid the actual sales information and evaded VAT of Taka 13.16 lakh.
Meanwhile, the police have arrested Amanullah, the Chief Operating Officer of eorange, in a case that charges him with embezzling customers’ money by not delivering products even as he was picked up from Dhaka’s area. The court earlier in the day ordered an overseas travel ban on five accused in the case even as three people, including the owner of the online marketplace eorange, were sent to police remand for five days in relation to the Taka1,100 crore embezzlement case after a Dhaka court approved the same.
The court after rejecting the bail pleas allowed the five-day remand after Gulshan Police Inspector Md. Aminul Islam produced eorange’s owner Sonia Mehjabin, her husband Masukur Rahman and the company’s Chief Operating Officer (COO) Amanullah in the court recently with a 10-day remand petition while it may be mentioned here that Sonia Mehjabin and Masukur Rahman who had surrendered in front of the Chief Metropolitan Magistrate Court, were sent to jail after the court rejected the bail plea on 17 August while police arrested Amanullah on 19 August, all related to the embezzlement case.
Meanwhile, the e-Commerce Association of Bangladesh (e-CAB) has suspended memberships of four e-commerce firms for failing to provide satisfactory responses to customer complaints. The companies are: 24tkt, Greenbangla, Excellent Big Bazar and eorange.shop, e-CAB said in a statement even as earlier, the association of e-commerce platforms sent show-cause notices to 16 companies, asking them to clear any confusion regarding a number of unresolved complaints from buyers and sellers as well as warnings and notices sent by the e-CAB itself.
These complaints include embezzlement, non-compliance with Digital Commerce Management Guidelines 2021, and running their organisations in a way that resembles multi-level marketing (MLM) operations even as nine of these companies denied having such complaints lodged against them while others sought time to resolve them, according to an e-CAB statement.
The association further urged people to be cautious when purchasing products with unusually high discount offers to ensure the security of their payments, and to refrain from doing business with companies that do not comply with the country’s e-commerce guidelines even as the Commerce Ministry suggested Bangladesh Bank take step directing banks to not accept deposits made by online shoppers to the accounts of e-commerce companies.
The move comes as the Commerce Ministry finds that some digital commerce companies are asking online shoppers to deposit money directly to their accounts even as the Ministry said this is done to evade the digital commerce guidelines 2021 it framed last month and to avoid Bangladesh Bank’s directive.
“As a result, customers can again be deceived,” the Commerce Ministry said in a letter to Bangladesh Bank Governor while in July, the Commerce Ministry decided to hold payments made by customers to local e-commerce platforms until consumers receive the purchased items.
The development followed rising allegations against a number of digital commerce platforms that they were not delivering goods timely or delaying too much against advance payments made by consumers for the products.
Given the steps taken by the Government and other related organisations, one can very well say it is just a matter of time before the e-commerce industry in Bangladesh is cleaned up and streamlined to give it a new direction.