The Bangladesh Bank has decided to dissolve the board of directors of Islami Bank within the next few days, and announced that all shares owned by S Alam Group and its associates will be under the government’s control.
Central bank Governor Dr Ahsan H Mansur announced the decisions in a press conference on Wednesday.
He said that they will form a new board of directors for Islami Bank soon.
Additionally, independent directors from S Alam’s other six banks will be shifted to Islami Bank for the time being.
Also dismissed directors from Islami Bank will be reappointed after they buy 2% of the shares.
Mansur: “The bank has to be rescued from its broken state. We might get all the money back but we have to rescue whatever can be salvaged.”
Regarding the directors, he said: “If one is properly fit and can buy 2% of shares, then they can become shareholder directors.”
The governor also said that Bangladesh Bank is working to investigate the extent of S Alam's shareholding in Islami Bank.
“We will also take over all the shares of S Alam Group against its liabilities as per law. The group may be able to get back the shares if it repays the money.”
“But I don't think they have that intention. They looted whatever they could.”
He also explained: “It will be easier to identify the shares held in their names, but it will take some time to identify the shares held under proxy names. The Anti-Corruption Commission (ACC), the Financial Intelligence Unit (BFIU), and the CID will work together to recover the money looted by S Alam.”
According to sources, S Alam and his associates hold five listed banks- Islami Bank Bangladesh, First Security Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank and one non-listed Bangladesh Commerce Bank.
Asked if boards of all banks under S Alam Group's control would be dissolved, Ahsan H Mansur said: “We are not in such a rush. A decision will be taken about the boards of these banks gradually.”
“Yesterday (Tuesday), we dissolved the National Bank board,” he informed.
According to an order issued by Governor Ahsan H Mansur on Tuesday, the banking regulator dissolved the National Bank's board to protect the depositors' money and public interest.
The order states that the National Bank Limited board is involved in activities contrary to the interests of the bank company and depositors by disrupting the financial condition of the bank due to policy-making weakness.
BSEC bans sale of S Alam-owned shares
The Bangladesh Securities and Exchange Commission (BSEC) has imposed a ban on 26 individuals and 56 companies associated with the S Alam Group, restricting them from buying, selling, or transferring shares.
This action follows a directive from Bangladesh Bank, which identified concerns related to the financial activities of these entities.
The BSEC has communicated this decision to the stock exchange, acting on a list provided by Bangladesh Bank.
The letter from Bangladesh Bank, dated Tuesday, August 20, highlighted that the directors on the boards of Islami Bank Bangladesh Plc, First Security Islami Bank Plc, Social Islami Bank Plc, Global Islami Bank Plc, Union Bank Plc, and Bangladesh Commerce Bank Limited, along with their representative directors, are closely linked to the Chittagong-based S Alam Group.
A BSEC official confirmed that the commission received the list from Bangladesh Bank and has since forwarded it to the stock exchange to enforce the ban.
Among those affected by the ban are key figures of the S Alam Group, including Mohammad Saiful Alam (S Alam), his wife Farzana Parveen, son Ahsanul Alam, and daughter Maymuna Khatun. Several other family members and associates are also included.
The companies facing the ban include ABC Venture Limited, Armada Spinning, Bangladesh Petrochemical, BLU International, Brilliant Business Company, Broadway Impax Company, C&A Accessories, C&A Fabrics, Carolina Business Enterprises, Dynamic Ventures Limited, Excel Dyeing & Printing, Excelsior Impex Company, Fatehabad Farm, Genesis Textile Accessories & Apparels, Grand Business Limited, Hasan Abasan Pvt. Ltd., Highclass Business Enterprises, Holistic International, Honeywell Securities Corporation, Ideal Flour Mills, JMC Builders, Karnaphuli Foods, Karnaphuli Natural Gas, Kingston Flour Mills, Kings Way Endeavors Ltd., Leader Business Enterprises, Lion Securities, Lionhead Business Resources, Marathon Trade International, Milkyway Impax Limited, Modern Properties, Naushin Steel, Ocean Resort, Padma Export Import Trading, Paradise International, Peaks Business Enterprises, Percepta Endeavors Limited, Platinum Endeavors Limited, Portman Cement Limited, Prasad Paradise Resort, Pushti Vegetable Ghee, Reliable Enterprises, Shah Amanat Natural Gas, Solid Wake Insurance, Sonali Corp Logistics, Uniglobe Business Resources, Unique Investment Securities, Unitex Cement, Unitex Steel Mills, Unitex Tree Limited, Vibrant Antiverse, Vector Trade & Business, Wesco Limited, and Western Designer Limited.