Finance Minister AMA Muhith has sought explanation from Bangladesh Bank about allegations of foreign investors of Islami Bank Bangladesh Limited.
“I have asked the central bank to provide clarification on the IDB's allegations,” Muhith said Thursday in reply to a question of the Dhaka Tribune.
Recently in a letter to finance minister, Saudi Arabia-based Islamic Development Bank, one of major foreign shareholders of IBBL, alleged that the IBBL board made the recent high-level changes in the absence and without consent of foreign shareholders.
Two foreign investors including IDB hold 52% shares of the IBBL.
IDB said the recent meetings which made the major changes were held on short notice, making it impossible for foreign investors to be present and give consent.
The letter reads: “It has become a normal practice for IBBL to schedule BOD meetings on short notice, thereby providing insufficient time to foreign shareholders' representatives to study board documents and make logistical arrangements to attend the meetings.”
IDB Group President Dr Bandar MH Hajjara signed the letter on January 24.
IDB Group president said the IBBL sent the invitation letter to IDB on January 2, inviting them to attend the meeting.
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Finance Minister AMA Muhith speaks to journalists regarding the row over a IDB letter regarding Islami Bank's situation outside his office at the secretariat Dhaka Tribune
On January 5, the chairman, deputy chairman and MD of IBBL were replaced at the 240th board of directors meeting without presence of foreign investors' representatives.
IDB president said: “How one can join a January 5 meeting if the invitation is sent only two days before.”
The finance minister said: “It is pretty serious issue why the concerned authorities did not inform IDB in time about the board meeting.”
He said former IDB president had informed him about some problems of IBBL.
“I thought that the current president is informed about those issues. But it is wrong, he too isn’t informed,” Muhith said.
The IBBL board comprises of 20 members, of whom two foreign members, IDB and a Saudi Arabian financial institution, collectively hold 52% of IBBL share.
The remaining directors are representatives of local share holder, and independent directors.
Earlier in a statement IBBL said: “The IDB retains its shares. They once thought to withdraw, but with the change in partner in Saudi Arabia, they have decided to stay on.”
This statement implied that IDB had some problems with IBBL’s ex-Saudi partner. But this is not the case as IDB president in his letter claimed that they have cordial relationship with all shareholders.
At the January 5 meeting, former bureaucrat Arastoo Khan was elected chairman of IBBL. Changes were also brought to the posts of managing director and heads of various committees of the bank and also to chief of the Islami Bank Foundation.
At present, of the 16 board of directors, seven are independent directors, seven from little known companies and two are foreign sponsors' representatives.