Islami Bank getting rid of S Alam clutch?

The board of Islami Bank, controlled by controversy-laced conglomerate S Alam Group, will be dissolved within the two days and all shares of the bank under the control of S Alam Group will now be under the government‍‍`s control, the central bank has decided.

Bangladesh Bank Governor Ahsan H Mansur said, "Islami Bank‍‍`s board will be dissolved and independent directors will be appointed for a short period of time. Subsequently, former directors holding 2% of share capital will be taken on the board." 

The governor was addressing a press briefing  at the BB headquarters in Dhaka  on Wednesday .

On Sunday, some customers of Islami Bank submitted an application to the newly appointed governor for the dissolution of the bank‍‍`s board.

It all started after the ouster of the Awami League government. 

At least six people have suffered bullet injuries amid an attack, clash, and shooting incident as two groups vie for control of Islami Bank on August 11.

The S Alam Group took charge of the bank in June 2017 after buying a controlling interest in its shares. Afterwards, many domestic and foreign companies began to dump the shares.

The protesting officials say that everyone appointed since the takeover was appointed ‘illegally’.

After the 12th parliament was dissolved on August 6, Islami Bank started facing calls for a ban on the trading of shares owned by S Alam Group, along with a request to dissolve the board of the beleaguered private bank.

Protestors demanded a restructuring of the board and removal of the top management of Islami Bank, which was taken over in 2017 by S Alam Group Chairman Mohammed Saiful Alam, his family members and the group‍‍`s associated entities under the patronage of the previous Awami League government.

Using influence, S Alam Group is alleged to have taken a huge amount of money from the bank.

Two groups submitted applications to the two regulatory bodies of the financial sector: Bangladesh Bank and the Securities and Exchange Commission.

Currently, among the directors, former shareholders do not hold 2% or more shares, due to which the independent director will be brought in, the BB governor told reporters in the briefing.

"The shares will be released to S Alam if they can repay the bank loan. S Alam‍‍`s liabilities will be adjusted if the loan is not repaid by selling the shares," he added.

When 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."

Meanwhile, the governor also said that Bangladesh Bank is working to investigate the extent of S Alam‍‍`s shareholding in Islami Bank.

He said: "Until all the loans taken by S Alam from the bank are repaid, their shares will remain under the custody of the government."

He added: "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."