[🇧🇩] Everything about Hasina's misrule/Laundered Money etc.

[Saif]

White paper on state of economy in the offing

The government will prepare a white paper on the state of the economy so that strategic steps can be taken to stabilise the economy, reach the SDGs, and mitigate the challenges after Bangladesh graduates from the LDC grouping.

www.thedailystar.net

White paper on state of economy in the offing
Debapriya to lead panel

Debapriya Bhattacharya. File photo

The government will prepare a white paper on the state of the economy so that strategic steps can be taken to stabilise the economy, reach the SDGs, and mitigate the challenges after Bangladesh graduates from the LDC grouping.

Economist Debapriya Bhattacharya will be the chief of a panel of economists and eminent citizens, who will come up with the white paper.

Debapriya, convener of the Citizen's Platform for SDGs and a distinguished fellow of the Centre for Policy Dialogue, will choose the members of the committee after talking to the chief adviser.

He said, "It [the white paper] will be a very pertinent transparency exercise to establish the benchmark of the economy. It will inform the future reform measures. I am grateful to the chief adviser that he has recognised its necessity and has taken immediate action."

The panel was given 90 days, starting yesterday, to submit the paper to Chief Adviser Prof Muhammad Yunus, said a statement from his office.

Bangladesh's economy has been suffering for a decade and a half due to mismanagement, corruption, capital flight, and unnecessary projects, said the statement.

"In this situation, the interim government should have a clear picture of the economy and [an outline of] the way out of the challenging situation. So, it decided to form a committee to prepare the white paper," it read.

The focus of the white paper will be on public finance management, inflation, food management, external balance, energy and power, private sector assessment, and employment.

Regarding public finance management, the committee will concentrate on domestic resource collection, public expenditure (public investment, annual development programme, subsidies and debt), and financing of budget deficit.

To get the picture of inflation and food management, it will analyse production, public procurement, and food distribution.

For understanding the challenges of external balance, the committee will focus on export, import, remittance, foreign direct investment, foreign exchange reserves, foreign finance flow and debt.

The panel will also delve into power demand, supply, pricing, costs and purchase agreements to get a clear idea of the problems in the energy and power sector.

Regarding private investment, it will focus on access to credit, electricity, connectivity, and logistics. It will also emphasise on employment at home and overseas, formal and informal wages, and youth employment issues.

The committee members will work for free. The committee will have its office at the Planning Commission and have secretarial support from the General Economic Division of the commission.

The chief adviser's office in the statement said the Hasina-led government left a loan burden of Tk 18,36,000 crore. The government borrowed from internal and external sources to meet its budget deficit without driving hard to raise tax collection.

Although the government's plan was to raise the tax-to-GDP ratio to 14 percent in the current fiscal year, it is now 8 percent. This is an example of economic mismanagement, it said.

In general, people are suffering mainly due to corruption, opportunity of capital flight, and syndication in the market.

Inflation was around 12 percent in July while food inflation was above 14 percent, according to the Bangladesh Bureau of Statistics.

The economy lost its path during the regime of the previous government, it added.​

 

[Saif]

ACC revives investigation into S Alam’s S’pore wealth

The Anti-Corruption Commission has decided to resume its investigation into the alleged money laundering by S Alam Group Chairman Mohammed Saiful Alam alias S Alam.

www.thedailystar.net

ACC revives investigation into S Alam’s S’pore wealth
It comes year after Star report

The Anti-Corruption Commission has decided to resume its investigation into the alleged money laundering by S Alam Group Chairman Mohammed Saiful Alam alias S Alam.

A recently held meeting at the ACC headquarters decided this, a senior ACC official said.

An investigation by The Daily Star last year found that S Alam built a US $1 billion empire in Singapore.

ACC sources said all relevant records regarding the allegations will be collected, including how much money he borrowed from banks, what assets he might have acquired illegally, and in which sectors the money was invested.

Citing an Appellate Division's ruling, Supreme Court lawyer Khurshid Alam Khan told The Daily Star, "The ACC could have investigated the money laundering allegations against S Alam before. Given the current circumstances, starting the investigation now is a positive step."

On August 13 last year, the ACC began investigating the money laundering allegations against S Alam after The Daily Star on August 4 last year published a report titled "S Alam's Aladdin's Lamp".

The report said S Alam built a business empire in Singapore worth at least $1 billion, although there was no record of him taking any permission from Bangladesh Bank to invest or transfer any funds abroad. It said S Alam bought at least two hotels, two homes, one retail space, and other properties over the last one decade, all the while seeking to remove his name from the paper trails.

On August 6 last year, the High Court directed the authorities to investigate the allegations of him owning businesses abroad without Bangladesh Bank's permission.

On February 5 this year, the Appellate Division of the Supreme Court scrapped the HC suo moto rule that had ordered an investigation.

However, the apex court said the ACC, the CID, and Bangladesh Financial Intelligence Unity (BFIU) can take legal steps on the matter on their own.

On August 18 this year, the ACC received a copy of the Appellate Division's order. Following the order, the ACC reopened the case on Tuesday.​

 

[Saif]

Bangladesh Bank frees Islami Bank from S Alam control

The Bangladesh Bank on Wednesday dissolved the Islami Bank Bangladesh board to free it from the control of S Alam Group and decided to appoint independent directors temporarily to manage the bank...

www.newagebd.net

Bangladesh Bank frees Islami Bank from S Alam control
Staff Correspondent 21 August, 2024, 18:19

The Bangladesh Bank on Wednesday dissolved the Islami Bank Bangladesh board to free it from the control of S Alam Group and decided to appoint independent directors temporarily to manage the bank.

The government has also seized all shares held by the Chattogram-based S Alam Group and its associates in Islami Bank and plans to sell those shares later to recover the group’s liabilities to the bank.

Bangladesh Bank governor Ahsan H Mansur announced the decision at a press conference, stating that nearly all of Islami Bank’s shares were held by the S Alam Group and its connected individuals.

He said that all the other banks would gradually be freed from S Alam’s control amid the seizure of all of their shares under government control.

The Bangladesh Securities and Exchange Commission has already restricted the transfer or sale of shares in six banks controlled by the group.

On August 20, the commission imposed the restriction on 26 individuals and 56 companies linked to the S Alam Group.

The Bangladesh Financial Intelligence Unit also froze the bank accounts of S Alam and his family members on August 18.

In 2017, S Alam Group took control of Islami Bank, allegedly with the help of a state agency, on the pretext of ousting individuals linked to Jamaat-e-Islami.

The government agency oversaw the whole operation when some individuals were forced to sign documents to facilitate the transfer of the bank’s ownership.

Over the past seven years, the group allegedly took Tk 75,000 crore from the bank under various anonymous names, accounting for half of the bank’s total loans.

Sources revealed that these loans were taken without following standard banking rules by companies linked to S Alam Group chairman Saiful Alam, his wife Farzana Parveen, his son Ahsanul Alam, their relatives, and employees.

Ahsanul Alam is the current chairman of Islami Bank.

Since 2017, S Alam Group, backed by the government, has also gained control of five other banks similarly. These banks are Social Islami Bank, First Security Islami Bank, Union Bank, Global Islami Bank, and Bangladesh Commerce Bank.

On May 7, the BB also handed over the control of the National Bank to individuals connected with the S Alam group.

The BB restructured the board of the bank on August 20 to free it from S Alam control.

The group, with the support of former governors Abdur Rouf Talukder and Fazle Kabir, reportedly withdrew around Tk 2 lakh crore from the banking sector.

Most of these loans were siphoned off and never used for business within the country, BB officials said.

Over 82 per cent of Islami Bank’s shares are held by S Alam Group and its associates, often under anonymous and forced acquisitions.

According to Dhaka Stock Exchange data, Islami Bank has a total of 1.6 billion shares, of which 82 per cent, valued at Tk 5,162 crore at current market rates, were acquired by the group.

Despite banking regulations that prohibit any group from owning more than 10 per cent of a bank’s shares, the central bank had previously not intervened in S Alam Group’s substantial share acquisition.

All of the banks under S Alam’s control are grappling with severe liquidity shortages and are surviving solely on an ‘illegal’ lifeline provided by Bangladesh Bank.

The latest action against the errant group came after Sheikh Hasina resigned as prime minister and fled to India on August 5, amid an unprecedented student-led uprising.

During Wednesday’s press conference, Mansur said that the investigation into the money laundering allegation against S Alam Group might be reopened soon.

He emphasised that no leniency would be shown to those who took loans and failed to repay them, with legal measures being pursued to recover funds.

He also mentioned that weak banks’ boards would be dissolved, as was recently done with National Bank, and the same would be applied to Islami Bank.

Mansur clarified that the government would not take over the operations of these banks.

Instead, independent directors would be temporarily appointed, and any shareholders, excluding S Alam Group, holding more than 2 per cent of shares and deemed capable might join the board in the future.

Regarding the loans taken by S Alam Group, Mansur said that exact amounts, including those obtained under false names, were still being investigated but would be uncovered in time.

Addressing the broader financial scandals in the banking sector, Mansur noted that resolving these issues would take time and could not be accomplished quickly.

He stressed that the central bank’s focus is now on protecting the economy, preventing defaults, and ensuring that Bangladesh’s international transactions remain stable.​

 

[Saif]

ACC begins probe into S Alam money laundering allegation

The Anti-Corruption Commission started an inquiry against S Alam Group chairman Mohammad Saiful Alam over allegations of laundering money to Singapore...

www.newagebd.net

ACC begins probe into S Alam money laundering allegation
Staff Correspondent 21 August, 2024, 23:30

The Anti-Corruption Commission started an inquiry against S Alam Group chairman Mohammad Saiful Alam over allegations of laundering money to Singapore.

ACC on Tuesday formed a three-member inquiry team led by its money laundering wing deputy director Md Nur-E-Alam to probe the allegations, confirmed a director of the commission.

He said S Alam is accused of laundering $ 1 billion to Singapore and they started the inquiry and were collecting records related to the complaint to facilitate the inquiry.

‘How much money has borrowed by S Alam from banks and in which sector the money was invested -- everything will be investigated along with his illegal assets,’ he added.

There are allegations against S Alam and his wife Farzana Parveen that they invested and laundered money through offshore banking to Singapore.

S Alam Group owner Saiful Alam has built a business empire in Singapore worth about $ 1 billion, although there is no record of taking any permission from Bangladesh Bank to invest or transfer any fund abroad.

The central bank has so far allowed 17 companies to invest outside the country but the business giant is not on that list.

The Chattogram-based S Alam group bought at least two hotels, two homes, one retail space, and other properties in Singapore over the last one decade.

Earlier, on February 4, the Appellate Division of Supreme Court scrapped a High Court suo moto order for inquiring into the reported money laundering and offshore investment of Tk 11 thousand crore by S Alam Group chairman Mohammad Saiful Alam and his wife Farzana Parveen within two months.

A six-judge bench, chaired by chief justice Obaidul Hassan, however, observed that there would be no bar for the ACC and Bangladesh Financial Intelligent Unit for inquiring into the allegation against the couple, if they feel so.

The Appellate Division rebuked the ACC for not to hold inquiry into the allegations against the couple immediately after publication of a report carried out by a English daily on August 4, 2023.

It scrapped the entire High Court ruling and directive issued on August 6, 2023 after taking into cognisance the newspaper report which said that the couple made offshore investment of Tk 11 thousand crore without permission.

The Appellate Division passed the order after disposing of a petition filed by the couple challenging the High Court ruling.

The HC had asked the ACC, BFIU and the Criminal Investigation Department to inquire into the reported allegations and submit the probe report to High Court in two months.​

 

[Saif]

Prof Yunus seeks UK govt’s support to bring back laundered money

Interim government Chief Adviser Prof Muhammad Ynus has sought support from the British government through its envoy in Dhaka to track and get back the money laundered to the UK allegedly by the people linked to the Sheikh Hasina-led previous government. “Huge people from the previous regime

thefinancialexpress.com.bd

Prof Yunus seeks UK govt’s support to bring back laundered money
UNB
Published :
Aug 21, 2024 21:52
Updated :
Aug 21, 2024 21:52

Interim government Chief Adviser Prof Muhammad Ynus has sought support from the British government through its envoy in Dhaka to track and get back the money laundered to the UK allegedly by the people linked to the Sheikh Hasina-led previous government.

“Huge people from the previous regime laundered money. Prof Yunus sought support to track those incidents and bring back the laundered money,” Chief Adviser’s press secretary Shafiqul Alam told reporters on Wednesday referring to Prof Yunus’ discussion with British High Commissioner to Bangladesh Sarah Cooke.

Alam said some of them owned houses in the UK and the questions are how this money went there.

Regarding works ahead to rebuild Bangladesh, Prof Yunus told the British High Commissioner that they have no option but to succeed.

Both sides acknowledged the deep relations between the two countries and the role of British Bangladeshis.

The UK is a longstanding partner and friend of Bangladesh and the two countries share a strong and enduring relationship, solidified by their deep people-to-people links and shared Commonwealth values.

The UK government earlier welcomed the appointment of the interim government in Bangladesh, led by Professor Yunus.

In the meeting, the High Commissioner and Chief Adviser discussed the breadth and depth of the Bangladesh-UK relationship.

They discussed how the UK government can support the interim government, as it charts a new inclusive and democratic future for Bangladesh. Discussions also covered the importance of youth engagement to navigate the challenges that lie ahead.

British High Commissioner Sarah Cooke said as Prime Minister Sir Keir Starmer wrote in his letter to Chief Adviser, the UK government warmly welcomes the appointment of Prof Yunus and the interim government.

“The interim government has the UK’s full support as it works to restore peace and order, ensure accountability and promote national reconciliation. We look forward to working with Professor Yunus and the interim government as they chart a peaceful transition to an inclusive, prosperous and democratic future for Bangladesh.”​

 

[Saif]

How big is the challenge of loan recovery from S Alam Group?

S Alam Group and its associates took out loans from Islami Bank ten times its equity whereas a single party or group should not be given more than 25 per cent of a bank's capital in loans. The Bangladesh Bank enforced the exposure limit in a directive issued in 2022 but overlooked its violat

thefinancialexpress.com.bd

How big is the challenge of loan recovery from S Alam Group?
MOHAMMAD MUFAZZAL AND FARHAN FARDAUS
Published :
Aug 22, 2024 00:34
Updated :
Aug 22, 2024 00:34

S Alam Group and its associates took out loans from Islami Bank ten times its equity whereas a single party or group should not be given more than 25 per cent of a bank's capital in loans.

The Bangladesh Bank enforced the exposure limit in a directive issued in 2022 but overlooked its violation by Islami Bank.

The group that has become infamous for defaulting on huge amounts of loans exceeded the exposure limit with four other banks too -- Social Islami Bank, Janata Bank, Union Bank, and Global Islami Bank.

Altogether, S Alam Group borrowed Tk 953.31 billion from six banks whereas the lenders' aggregated equity is Tk 200.35 billion. First Security Islami Bank is the only one among the six banks which lent 10 per cent, within the limit, of its capital to the group.

This is the backdrop against which the securities regulator imposed restrictions on purchase, sales and transfer of shares by entities of S Alam Group, its owners and family members of the banks.

The move will help recover loan money - at least partially, said Md. Moniruzzam, managing director of Prime Bank Securities.

"The government will have to set rules to sell out the shares of S Alam Group and his associates," he added.

However, the loan amounts are much higher than the banks' total equity, which means the money, if recovered, from selling S Alam's stakes in the banks will be negligible.

The problem was made worse as the lenders kept on rescheduling loans over the years, taken by S Alam Group and its associates.

Banks usually keep 1 per cent general provision against regular loans while they are supposed to keep 100 per cent provision against bad loans. Loans become sour when 12 installments are missed in a row.

Thanks to rescheduling, defaulted loans of S Alam Group were shown as regular loans. So, any support from the provision against the loans is unlikely.

Moreover, the central bank's relaxation of loan classification policy and rescheduling process made it harder to understand the magnitude of the problem.

Lets' consider an example to illustrate the matter in hand.

Suppose, a listed bank X has equity worth Tk 22, the amount invested by owners.

Deposits received by the bank amount to Tk 200 and S Alam Group took out a loan worth Tk 42 from this bank.

If the borrower defaults on loan repayments, the equity will be Tk 20 in the negative, meaning shareholders' equity will get wiped out.

In consequence, the actual value of the deposits will come down to Tk 180 from Tk 200.

In that case, depositors will have to sacrifice 10 per cent of their funds kept under the custody of X unless the government takes any measure to compensate for the loss.

The bank's provisioning, if any, against the bad loan can be an instrument to tackle the negative impact on the depositors. If the bank can get a support worth Tk 20 from the provision account, depositors will remain unaffected.

Apart from the lack of proper provisioning, the Shariah-compliant banks are facing absence of other support mechanisms as well.

The scheduled banks are required to maintain cash reserves equivalent to 4 per cent of total deposits and 13 per cent statutory liquidity with the Bangladesh Bank.

Statutory liquidity remains invested in government bonds.

The banks which maintain these compliances properly get support from the tools during a crisis period.

But Shariah-compliant banks maintain compliances at a reduced ratio for their limited scope of operations.

Hence, Islami Bank, Social Islami Bank, First Security Islami Bank, and Global Islami Bank will not have the support at this critical juncture.

Besides, industry experts are skeptical about the collateral used for the loans since in most cases S Alam Group had its own men deployed in the boards of the banks when the loans were sanctioned. The business conglomerate had forcefully taken over control of the boards of Islami Bank and Social Islami Bank. Its ownership of First Security Islami Bank and Global Islami Bank is also marred by corrupt banking practices.

S M Galibur Rahman, head of research & strategic planning of Shanta Securities, said the loans granted to S Alam Group had been approved based on political grounds rather than project merits.

"We expect the new governor will ensure the proper reporting and provisioning in accordance with international standards," he said.

The banking commission, a proposed body, is expected to take proper steps to solve the issue of non-performing loans.

Asif Khan, chairman of EDGE Asset Management, said an audit is required to address the problems with the troublesome banks.

If the equity of a bank is wiped out, depositors may not get back a portion of their money.

To revive a bank, small depositors should be paid back fully while large ones can be offered equity against deposits.

"A further inclusion of fresh funds and management efficiency can turn a troublesome bank into a profitable entity. This is the strategy that helped Eastern Bank to get in the good books of the financial sector."​

 

[Saif]

ডাইনি হাসিনার মুখের গন্ধ | শেখ হাসিনার ফানি কার্টুন। শেখ হাসিনা বনাম ইবলিশ শয়তান

 

[Saif]

‘Bring back Islami Bank’s misappropriated funds’

Customers of Shariah-based banks yesterday urged the authorities concerned to bring back funds of Islami Bank Bangladesh which have allegedly been misappropriated by S Alam Group and ensure legal steps against the group’s owner Mohammed Saiful Alam and those who abetted him..The customers,

www.thedailystar.net

‘Bring back Islami Bank’s misappropriated funds’
Says a customers' forum of Shariah-based banks

Customers of Shariah-based banks yesterday urged the authorities concerned to bring back funds of Islami Bank Bangladesh which have allegedly been misappropriated by S Alam Group and ensure legal steps against the group's owner Mohammed Saiful Alam and those who abetted him.

The customers, arriving from different parts of the country and under the banner of "Shariah-Based Islamic Banking Customer Forum", made the demand by organising a conference at the Hotel Purbani International in Dhaka.

The demands come against the backdrop of the Bangladesh Bank dissolving the Islami Bank Bangladesh board on August 22.

Documents show S Alam Group owns as much as 82 percent stakes in Islami Bank Bangladesh, but the conglomerate maintains it has 32 percent stakes.

The central bank took over S Alam's shares against its liabilities and the shares would be returned if the conglomerate repays the amount it owes to the Shariah-based bank.

Between 2017 and June this year, the Chattogram-based conglomerate and its associates' companies took Tk 74,900 crore, which is 47 percent of Islami's total outstanding loans as of March.

Documents pieced together by The Daily Star show that most of the loans were taken by bypassing banking rules and regulations.

Nearly 10 crore people of the country are directly and indirectly associated with Islamic banking and about 80 lakh expatriates from the Middle East send remittances to the country through Islamic banks, said speakers at yesterday's conference.

But over the years, the remittance inflow has decreased significantly, they alleged.

The small and medium enterprise sector and economy have been severely affected by the misappropriation of a huge amount of funds of Islami Bank Bangladesh, said Mohammad Abdul Majeed, former secretary and chairman of the National Board of Revenue (NBR).

The speakers proposed appointing Islami Bank Bangladesh customers as its directors alongside those who were there prior to the group taking on its stakes.

They also demanded reinstatement of officials sacked by S Alam and termination of employment of around 10,000 people employed by S Alam.

Some customers also urged rescheduling their loans for 10 years, citing that they have suffered financially.

In the event, the customers also announced formation of a 15-member committee to run the forum.

Abdul Haque, former director of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and a businessperson in the automobile sector of the country, was made the convener of the forum.

This forum will work to "bring back the lost glory and accountability of Islamic banks", monitor their activities and protect the interests of customers.

Economist Prof Abu Ahmed was the chief guest at the event.

S Alam is apparently on the run. He did not receive calls yesterday.​

 

[Saif]

Govt cancels MoU with S Alam for modernising state sugar mills

A memorandum of understanding (MoU) signed between the Bangladesh Sugar and Food Industries Corporation (BSFIC) and S Alam & Co, aimed at modernising ailing state-run sugar mills, has been cancelled by the government.

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Govt cancels MoU with S Alam for modernising state sugar mills

A view of the state-owned Setabganj Sugar Mills in Dinajpur. The government decided to close down some sugar mills at the end of 2020 as they were continually incurring losses and were in desperate need of modernisation. Photo: Star/file

A memorandum of understanding (MoU) signed between the Bangladesh Sugar and Food Industries Corporation (BSFIC) and S Alam & Co, aimed at modernising ailing state-run sugar mills, has been cancelled by the government.

The agreement was signed on July 4 with initial plans to conduct a feasibility study before implementing projects to boost sugar production.

"The Ministry of Industries (MoI) cancelled the MoU that was signed with S Alam yesterday," said Zakia Sultana, senior secretary to the MoI.

According to her, the MoU was non-binding, for which it was possible to cancel it.

However, she did not offer any reason for the cancellation. Currently, just nine of the 15 sugar mills under the BSFIC are operational.

The government decided to close down the six others at the tail end of 2020 as they were continually incurring losses and were in desperate need of modernisation.

In a government order issued on December 2, 2020, the BSFIC said production at the state-owned sugar mills in Pabna, Shyampur, Panchagar, Setabganj, Rangpur and Kushtia would be halted until further notice.

That same month, companies from Japan, Thailand and the United Arab Emirates placed their final proposal to the MoI for a project that would see them team up to upgrade and ensure profitability of the six shuttered mills and export by-products.

Sutech Engineering Co of Thailand, Sharkara International of the UAE and Sojitz Machinery Corporation of Japan planned to invest Tk 5,000 crore under a joint venture.

With the Japan Bank for International Cooperation and Exim Bank of Thailand keen to finance the project, final approval from the Prime Minister's Office was expected by 2022.

However, this never materialised.

With the government moving slowly to implement the joint venture, S Alam and Co convinced the MoI to sign the MoU for modernising the mills, the BSFIC officials alleged.

According to the MoU, sugarcane production would have been boosted through the training of farmers in the use of different technology.

Alongside that, modern sugarcane processing plants, 6 MW agrovoltaic solar power plants, by-product processing plants and packaging factories would have been constructed.

Furthermore, cold storage and agricultural product processing industries would have been developed.

The concern voiced by the BSFIC officials aligns with numerous allegations against Mohammad Saiful Alam, head of S Alam and Co, which are going around in the aftermath of Sheikh Hasina's resignation as prime minister on August 5.

The Bangladesh Securities and Exchange Commission (BSEC) on Tuesday barred S Alam, his family members and the companies they own from transferring or selling their shares in six banks.

Meanwhile the Anti-Corruption Commission (ACC) decided to resume its investigation into S Alam in connection with money laundering.

An investigation by The Daily Star found that S Alam had built a US $1 billion empire in Singapore. On August 4, 2023, a report was published by the same daily highlighting the allegations.

Nine days later, the ACC launched an investigation in line with instructions from the High Court to find out if S Alam had taken money out of the country without approval from the central bank.

However, the Appellate Division of the Supreme Court scrapped the suo moto rule that had ordered the investigation in February this year. It added that the ACC could take legal steps of its own accord.

As such, the ACC decided to resume its investigations on August 22.

The ACC sources said all relevant records regarding the allegations will be collected, including how much money he borrowed from banks, what assets he might have acquired illegally, and in which sectors the money was invested.​

 

[Saif]

Writ challenges laws for Bangabandhu's family members

A writ petition was filed with the High Court yesterday challenging the legality of the Protection of Family Members of the Father of the Nation Act 2009 and the Special Security Forces Act 2021

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Writ challenges laws for Bangabandhu's family members

Sheikh Hasina and Sheikh Rehana.

A writ petition was filed with the High Court yesterday challenging the legality of the Protection of Family Members of the Father of the Nation Act 2009 and the Special Security Forces Act 2021.

Supreme Court lawyer and Assistant Secretary General of Human Rights Support Society (RSS) Mohammad Moniruzzaman filed the petition as a public interest, saying that the two laws are contradictory to the constitution as those have ensured the facilities of protection and security for only the father of the nation and former prime minister Sheikh Hasina and their family members.

Other family members of the father of the nation are ordinary citizens like others of the country and providing such facilities for their family members are discriminatory and unconstitutional.

Advocate Moniruzzaman told the Daily Star that the HC may hold a hearing of the petition on Tuesday.

Law secretary, home secretary, finance secretary, Special Security Forces's director general and former Prime Minister Sheikh Hasina, her sister Sheikh Rehena, her (Hasina) son Sajib Wazed Joy and daughter Saima Wazed Putul, her family members Redwan Mujib Siddique Bobby, Tulip Siddique and Azmina Siddique Rupanti have been made defendants in the writ.

In the petition, Moniruzzaman prayed to the HC to pass an order on the government to recover the benefits and facilities already enjoyed by the family members of the Father of the Nation and to direct the respondents concerned to stop providing special security arrangements for them.

In the petition, he sought an order from the HC for the authorities concerned to prepare a report on the state's expenditure on all the benefits and properties enjoyed by the family members of the Father of the Nation and submit it to the court.​

 

[Saif]

Bangladesh Bank dissolves S Alam-controlled board of SIBL

Bangladesh Bank on Sunday dissolved the board of directors of Social Islami Bank Limited and appointed independent directors in an effort to free the bank from the controversial...

www.newagebd.net

Bangladesh Bank dissolves S Alam-controlled board of SIBL
Staff Correspondent 25 August, 2024, 20:10

| Collected photo

Bangladesh Bank on Sunday dissolved the board of directors of Social Islami Bank Limited and appointed independent directors in an effort to free the bank from the controversial control of the S Alam Group.

In a letter to the bank’s managing director, the central bank outlined its decision on the day to place the bank under a new board of directors.

Previously, the SIBL board was chaired by Belal Ahmed, son of Chattogram-based S Alam Group chairman Saiful Alam.

The newly formed five-member board includes one shareholder director and four independent directors.

Major (retd) Md Rezaul Haque, a founding shareholder of the bank, has been appointed as a director.

The four independent directors are former Bangladesh Bank executive director Maksuda Begum, Dhaka University finance professor M Sadiqul Islam, former Rupali Bank deputy managing director Md Morshed Alam Khandkar, and chartered accountant Md Anwar Hossain.

A new chairman will be selected from among these directors.

This marks the second instance of a bank being officially freed from the S Alam Group’s control.

On August 20, Bangladesh Bank similarly dissolved the board of directors of Islami Bank Bangladesh, controlled by the S Alam Group, and appointed independent directors.

The S Alam Group, with support from the former Awami League-led government, took control of SIBL in 2017, ousting several founding shareholders and directors in the process.

Since then, enormous sums of money were allegedly siphoned from the bank through various anonymous companies.

S Alam Group has been accused of engaging in widespread irregularities within SIBL, particularly in recruitment and loan disbursement.

Bank officials claim that the group withdrew around Tk 15,000 crore in loans, mostly under anonymous names.

These loan irregularities have pushed the bank into a severe liquidity crisis, leaving its current account with Bangladesh Bank in the red and forcing it to rely on central bank bailouts.

Additionally, SIBL concealed Tk 7,936 crore in defaulted loans, with allegations of collusion by senior central bank officials.

The inspection team discovered a shortfall of Tk 8,127 crore in provision at the end of December 2023.

But, the central bank reported that SIBL’s total provisioning requirement was Tk 1,370 crore, of which the bank had met Tk 1,306 crore, leaving a shortfall of only Tk 64 crore.

Therefore, most of the irregularities by the S Alam Group occurred under the watch of Bangladesh Bank, with some of its senior officials’ involvement in the misconduct.

Following recent political shift, some SIBL shareholders staged a protest on August 11, calling for the bank to be freed from S Alam Group’s control.

At a press conference, they accused Saiful Alam and his associates of siphoning off significant sums, endangering not just SIBL but the entire financial sector. Depositors have reportedly faced difficulties in withdrawing their funds, they said.

The protest and press conference were attended by several shareholders, including former chairman Rezaul Haque.​

 

[Saif]

S Alam barred from fund transfer, cashout, LC opening

The Bangladesh Bank yesterday instructed six S Alam-owned banks to stop any money going out of the accounts in the name of the Chattogram-based business giant, its associates’ companies and related persons.

www.thedailystar.net

S Alam barred from fund transfer, cashout, LC opening

The Bangladesh Bank yesterday instructed six S Alam-owned banks to stop any money going out of the accounts in the name of the Chattogram-based business giant, its associates' companies and related persons.

However, all types of deposits can be accepted in their accounts, according to the letter from BB's banking inspection department-7.

Islami Bank, First Security Islami Bank (FSIBL), Social Islami Bank (SIBL), Union Bank, Global Islami Bank (GIB) and Bangladesh Commerce Bank (BCB) have already passed on the BB instruction to their branches and sub-branches.

The instruction was given as the central bank has started to reconstruct the board of directors of the banks linked to the business group, said BB spokesman Md Mezbaul Haque,

Once the banks' boards are reconstituted, the instruction to bar any withdrawals from the accounts would be relaxed, he added.

The BB has verbally instructed the other banks to suspend fund transfer and withdrawal requests of S Alam Group, its associates' companies and related persons, The Daily Star has learnt from the managing directors of three leading banks.

Banks have been asked to not renew any investment facilities or stop any new investment. They have been instructed to suspend any new disbursement or withdrawal.

The lenders will not be able to disburse and withdraw any new investment from the investment accounts that are previously approved in their name, the BB letter said.

The banks have also been asked not to open letters of credit (LC) in favour of the companies of the business group and its associates' companies.

However, banks can open LC in favour of the companies at a 100 percent margin.

Banks have also been asked to disallow bill discounts or purchases in their name; not to make any application to the central bank for any refinance scheme; ban credit card transactions; and decline requests for fund transfers outside of Bangladesh in their name.

Founded in 1985 by Mohammad Saiful Alam, a relative of former Awami League politician Akhtaruzzanan Chowdhury Babu and former Land Minister Saifuzzaman Chowdhury, S Alam Group has grown into one of the largest conglomerates in Bangladesh.

For instance, S Alam is one of the four edible oil importers and processors along with TK Group, City Group and Meghna Group. Together, they control 80 percent of the total edible oil market in Bangladesh, according to import data from the National Bureau of Revenue.

Its subsidiary S Alam Refined Sugar Industries was the third-largest importer of sugar in 2023, accounting for a fifth of the country's demand.

S Alam Group and its associate companies took out Tk 95,331 crore between 2017 and June this year from six banks, with 79 percent of the sum coming from Islami Bank, data showed.

Documents pieced together by The Daily Star show that most of the loans were taken by bypassing banking rules and regulations, in a testament to how the Chattogram-based conglomerate exerted its influence on the country's banking sector.

In a separate letter, the Bangladesh Financial Intelligence Unit (BFIU) on Sunday sought detailed information on the overall banking activities of Alam, his 12 family members and their companies.

The 12 family members include his wife Farzana Parveen, his two older sons Ahsanul Alam and Ashraful Alam, and his brothers Osman Ghani, Abdus Samad, Rashedul Alam, Shahidul Alam, Mohammed Abdullah Hasan and Morshedul Alam, who passed away in May 2020 from Covid-19.

The account details of Ghani's wife Farzana Begum and Samad's wife Shahana Ferdous were sought too.​

 

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Bank accounts of 4 firms linked with S Alam’s personal secretary frozen

The BFIU found Tk 99.7 crore at the accounts of four companies of Md Akiz Uddin, also a former deputy managing director of Islami Bank Bangladesh

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Bank accounts of 4 firms linked with S Alam’s personal secretary frozen
The BFIU found Tk 99.7 crore at the accounts of four companies of Md Akiz Uddin, also a former deputy managing director of Islami Bank Bangladesh

The Bangladesh Financial Intelligence Unit (BFIU) has asked banks to freeze the accounts of four companies linked with Md Akiz Uddin, a former deputy managing director of Islami Bank Bangladesh and personal secretary of S Alam Group chairman.

The BFIU found Tk 99.7 crore in the accounts of the four companies: Rahman Rahman & Son's, Moshtaq Traders, Nazrul Enterprise and Alam Trading Builders.

The anti-money laundering agency also instructed banks to suspend the transactions at those accounts and sought an update on the accounts in the next five working days.

Akiz Uddin has not come to work at Islami Bank since Sheikh Hasina resigned from the post of prime minister and fled the country on August 5.

Recently, Islami Bank sacked its eight high officials, including Akiz Uddin, who influenced Islami Bank in various activities, including loan sanctions, industry insiders said.​

 

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How a family grabbed multiple banks

The Bangladesh Bank is supposed to protect customers’ interests, but it did not do so when it permitted Mohammed Saiful Alam and his family to seize multiple banks and funnel enormous sums as loans.

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How a family grabbed multiple banks
S Alam and his family bypassed rules cleverly in capturing seven banks and two non-banks

The Bangladesh Bank is supposed to protect customers' interests, but it did not do so when it permitted Mohammed Saiful Alam and his family to seize multiple banks and funnel enormous sums as loans.

Alam, the chairman of S Alam Group, and his family members used the central bank's special permission to unprecedentedly possess large shares of seven banks and two financial institutions despite prohibition by the Bank Company Act.

For example, they have a 30 percent stake in Islami Bank while the law caps such shareholding by a family in a bank at 10 percent. That allowed Alam's relatives to take a total of Tk 25,000 crore loans from the bank with far less investment in it, official data shows. The actual amount is believed to be more than three times the official figure.

The Alams are the only family in Bangladesh with all members and some of their relatives sitting on the boards of several banks simultaneously. They deftly captured the banks' shares as the central bank relaxed the rules for them.

Analysts and experts have condemned such a practice as "totally unacceptable and absurd", as it has put the banks, and the entire financial sector at risk.

The experts have been calling for efforts to reduce family control over the banks for a long time. However, their suggestion fell on deaf ears with the central bank bypassing rules to let Alam and his family strengthen their control over the banks.

All the members of the family were directors of different banks until last week when the central bank dismantled the board of the Islami Bank to ensure good governance after the new interim government launched its efforts to fix the troubled sector as part of a broader reforms plan.

Alam is the chairman of First Security Islami Bank's board while his wife Farzana Parveen is a director. Their son Ahsanul Alam, daughter Maimuna Khanam, and son-in-law Belal Ahmed control the boards of Islami Bank, Global Islami Bank and Social Islami Bank respectively. Alam's brothers, sisters, and other relatives also sit on the boards of several banks.

The law bars a person with a significant shareholding in a bank from buying a substantial stake in another bank. The same rule applies to their family members and companies.

Alam, however, grabbed Islami Bank and Social Islami Bank in 2017 despite having significant shares of First Security Bank, and Union Bank.

A top official of the Bangladesh Bank confirmed that Alam's family received the central bank's approval to buy the stakes despite the banking regulator's obligation to block the process.

The law states that not more than three members of a family are allowed to hold the directorship of a bank. A family and their firms cannot acquire more than 10 percent of shares jointly.

However, besides the 30 percent stake in Islami Bank, Alam's family members and their firms together own about 22 percent of Social Islami Bank shares, 28 percent of First Security Islami Bank, and 30 percent of Global Islami Bank, according to the shareholding reports of the banks.

They also have 5 percent shares in each of Al-Arafah Islami Bank and Northern Insurance, and more than 70 percent in Aviva Finance and Union Bank each.

Shareholding data of Bangladesh Commerce Bank could not be obtained but the website of S Alam Group claims it owns the bank.

Toufic Ahmad Choudhury, director general of Bangladesh Academy for Securities Markets (BASM), described the control of Alam's family over the banks as "totally unacceptable".

Although legal restrictions were put in place to stop the family control in banks, S Alam had been allowed to wield its control over the banks for its own benefit, Choudhury said, referring to the loans taken by the Alam family and their relatives.

"The banking business is quite different. Depositors are the real owners of the banks," said Choudhury, also a former director general of the Bangladesh Institute of Bank Management (BIBM).

An analysis of Islami Bank's financial reports shows that the Shariah-based bank provided about Tk 25,000 crore loans to Alam's relatives. Social Islami Bank showed nearly Tk 5,000 crore loans to them in its financial reports.

The other banks followed in the footsteps of these two banks. Officials of these banks, who requested anonymity, said the loans given to Alam's relatives were bigger than what official data shows.

The total amount could be above Tk 75,000 crore from Islami Bank alone, one of the officials said.

A top official of a bank said many directors abused their power to save themselves from becoming loan defaulters by rescheduling loans year after year. So the criteria for directors should be changed in such a way that will not allow them to have their loans rescheduled when they face a default.

Data also showed how the S Alam family's presence on the board affected the banks, all of which except Al-Arafah Islami Bank remain in the yellow zone – meaning their financial health is between "good" and "fragile".

Fahmida Khatun, executive director of the Centre for Policy Dialogue, said this is "the best example of how a single family controls the banking sector".

As the regulatory body, the Bangladesh Bank is responsible for allowing this to happen while the government gave S Alam a free rein over the banks by amending the laws, she said.

Despite repeated requests from analysts, parliament allowed the increasing presence of families on a bank's board. It doubled the number of members of a family allowed on a bank's board to four before reducing it to three amid huge pressure from analysts. On top of that, a director was allowed to remain on the board for 12 years.

"This is absurd," said Fahmida.

When many family members remain on a bank's board, they can influence the board for the benefit of people or organisations linked to them. In some cases, directors with a much lower stake also obtain such benefits.

For instance, Alam's relatives received loans above Tk 25,000 crore from Islami Bank officially while their contribution to its paid-up capital was around Tk 300 crore, according to the financial report of the bank.

It shows how high their gain is compared to their investment in the bank, Fahmida said.

The economist recommended amending the law further to allow only one member of a family on a bank's board and limiting a bank director's tenure to six years.

A top official of a leading private bank, who preferred not to be named, questioned the Bangladesh Bank's role in allowing the S Alam family to control so many banks. "What did the central bank do when the family was grabbing the banks? It was their responsibility to stop the family," he said.

The Daily Star tried to contact Saiful Alam via text message, but he did not reply. BB spokesman Mezbaul Haque did not receive phone calls for comment.​

 

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Possible graft in model mosque project to be probed: adviser

Religious adviser AFM Khalid Hossain today said the interim government will form an investigation committee to probe alleged corruption in the construction of model mosques

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Possible graft in model mosque project to be probed: adviser

Religious adviser AFM Khalid Hossain today said the interim government will form an investigation committee to probe alleged corruption in the construction of model mosques.

Speaking at a seminar at the Islamic Foundation in Dhaka's Agargaon area, the adviser also revealed plans for a high-powered committee to investigate the deterioration of the Islamic Foundation, stating that those responsible for its decline will be held accountable.

"The Islamic Foundation will be restructured and transformed into a vibrant institution," he said.

The adviser emphasized that changes would be made within the organization, including reassigning long-serving officers from the head office to the field and promoting qualified field officers to central roles.

Khalid also criticised the Islamic Foundation for deviating from its original mission and vision in recent years, attributing this shift to political interference.

"The Islamic Foundation must be kept above politics," he said.

The religious adviser further said that intelligence agencies would assist in investigating any illicit wealth accumulation by Islamic Foundation officials and employees over the past 15 years.

"If any irregularities or corruption are found, legal action will be taken," he added.​