The auditor of People’s Leasing and Financial Services has identified widespread accounting discrepancies, regulatory breaches and governance weaknesses in the non-bank financial institution’s 2025 financial statements, while warning of material uncertainty over its ability to continue as a going concern.
In its audit report for the year ended on 31 December 2025, the auditor issued a qualified opinion alongside separate sections on going concern, emphasis of matter and other matters, citing multiple unresolved issues affecting the company’s financial reporting.
Among the key findings, the auditor said People’s Leasing did not prepare consolidated financial statements despite holding an 83 per cent stake in subsidiary PLFS Investments. The omission means the group’s financial position, performance and cash flows were not presented on a consolidated basis. It also found discrepancies between the parent company and the subsidiary over inter-company loans and the value of the parent’s investment.
The report identified significant inconsistencies between accounting records, regulatory reports and supporting data, including unreconciled differences in deposit balances and loan records. It said software calculation errors and unreconciled balances cast significant doubt on the completeness, accuracy and reliability of the company’s financial records.
Asset quality remained severely impaired. Classified loans and leases stood at Tk1,056.93 crore, equivalent to 98.09 per cent of the outstanding portfolio of Tk1,077.53 crore.
The auditor also found that 335 of the company’s 426 borrowers had received loans without collateral. Eligible collateral amounted to only Tk58.97 crore, while attempts to verify some mortgaged assets either raised questions over their existence or could not be completed.
The report said People’s Leasing had carried borrowings worth Tk276.40 crore from banks and financial institutions since 2019 without recognising any interest expense. Had interest been accrued under the relevant financing agreements, liabilities and accumulated losses would have increased significantly, it said.
The auditor further questioned margin loans worth Tk314.28 crore, citing non-compliance with the Finance Company Act 2023, and noted that many historical loans had been disbursed without collateral in breach of legal limits applicable at the time.
It also flagged failures to maintain the required Cash Reserve Requirement and Statutory Liquidity Ratio, establish a Basel Implementation Unit and meet minimum regulatory capital requirements.
The report said the company had not transferred Tk21.56 crore in unclaimed dividends to the Capital Market Stabilization Fund in line with securities regulator directives. It also said deducted value-added tax, tax and excise duties amounting to Tk232.25 crore had not been deposited into the government exchequer.
On the company’s financial viability, the auditor warned that continued losses, negative equity, a negative capital adequacy ratio and negative operating cash flow cast significant doubt on People’s Leasing’s ability to continue as a going concern.
The report also drew attention to adjustments made to reconcile loan and depositor balances, departures from certain International Financial Reporting Standards and International Accounting Standards to comply with Bangladesh Bank directives, and findings from a special audit covering the period from 2009 to 2022.
Separately, the auditor said legal proceedings had been initiated against 96 of the company’s 345 bad loan and lease accounts.
