Hasina Rehana and 3ex-governors implicated Islami Bank scams

S Alam Group’s ‘Bank Loot’ Story

Staff Correspondent: Sheikh Hasina and Sheikh Rehana along with three immediate past governors were involved with the Islami Bank scam. Md. Shahabuddin, the President and S Alam were the mastermind.
Islami Bank Bangladesh Limited (IBBL) was once considered as one of the most profitable banks in Bangladesh. The existence of this bank came under threat after it was taken over by S Alam Group. It was alleged that a long-term plan was taken to destroy the bank. It is also alleged that there was direct intervention of the intelligence agency of the then government and the central bank in the implementation of this plan.
Planned 4-yrs ago, involved 3 governors
According to a then top official in Bangladesh Bank, the Awami League government planned to take over Islami Bank at least four years before it was taken over by S Alam. On condition of anonymity, this official said that three governors of Bangladesh Bank were directly involved in this work. The then governor Dr. Atiur Rahman. At that time, only a handful of officials including SK Sur Chowdhury, Shubhankar Saha, who were in the top positions of the central bank, worked to free the Jamaat in Islami Bank. Related sources say, After the departure of Dr. Atiur Rahman, the number of representatives of S Alam in Bangladesh Bank increased.
The official also said that the former governor Fazle Kabir encouraged the S Alam group to take over other banks in addition to playing a direct role behind the takeover of Islami Bank. It was during his tenure that Chittagong-based business group S Alam Group started looting money. The central bank has supported this looting for years. Even the likes of S Alam have been appointed deputy governors. A couple of the deputy governors were retained as advisers after their terms expired on the advice of S. Alam. That is, S Alam-Bandana continues on every floor of the Central Bank for years.
He also said that during Fazle Kabir’s tenure, most of the officials, except for a handful of top positions in the central bank, developed friendship with the S Alam group. Many middle-ranking officials of the central bank joined hands with the S Alam group in the hope of working in S Alam’s company after retirement.
According to central bank sources, during the time of former governor Abdur Rauf Talukder, S Alam Group withdrew money from banks other than Islami Bank. At this time the entire Bangladesh Bank became S Alam Group-dependent. During the time of these two governors (Fazle Kabir and Abdur Rauf), the office of the governor of Bangladesh Bank and the residence of the governor in Gulshan, the ‘Governor House’, became the haunt of the owners and officials of S Alam Group.
Abdur Rauf Talukder helped money laundering from Islami Bank by printing money on the occasion of being the Governor of the Central Bank. Abdur Rauf formed a syndicate with some of his handpicked officials to assist the S Alam group. This syndicate was created to prevent any inspection or investigation into S Alam’s affairs. It was on the orders of this syndicate that journalists were banned from entering Bangladesh Bank. This syndicate even controlled the Anti-Corruption Commission, NBR and Courts for S Alam.
Occupancy begins
Initially, in 2013, the Jamaat-controlled bank was called for boycott from the Janajagran Manch in Shahbagh. Propaganda is carried out – Islami banks are involved in terrorist financing. At that time, Shamsul Haque Tuku, the state minister for home affairs of the Awami League government, claimed in a meeting – ‘8 percent of Islami Bank’s financing is related to terrorism.’ After his statement, foreign investors lost confidence in the bank. At that time, the governor said that the plan to take over the bank from the government. Atiur Rahman was informed. At that time, there was a proposal from various quarters to nationalize this bank by freeing the Jamaat and bringing it under the control of the government. Various progressive organizations, sectarian political parties also demanded to bring Islami banks under the control of the government.
According to related sources, the governor at that time Atiur Rahman tasked a committee headed by SK Sur Chowdhury, the then Deputy Governor of Bangladesh Bank, to prepare a report on what would be the process of making the bank Jamaat-free. Later a 100 page report was prepared. In that report of the Central Bank, the reformation is said to keep Abdul Mannan as MD of the bank. Besides, importance is imposed on bringing changes in the Board of Directors of Islami Bank. The central bank is said to intervene in the appointment of MD and DMDs. However, as a strategy, it was proposed to increase the salary of the then Managing Director Mohammad Abdul Mannan as well as increase his tenure.
At that time, SK Sur played an important role directly and indirectly in handing over the control of Islami Bank to the S Alam Group. There is also an allegation against him of helping former managing director of NRB Global Bank and Reliance Finance Limited PK Halder to launder about Tk 10,200 crore from four non-bank financial institutions. The entire ownership of this Reliance Finance later came into the hands of the S Alam Group.
Abdul Mannan was baited
According to a Bangladesh Bank source, MD Abdul Mannan was persuaded to make Islami Bank Jamaat-free by increasing his salary and tenure. Abdul Mannan agreed. Apart from this, a 20 percent salary hike is proposed for all the general officers to prevent rebellion.
According to sources, Dr. Atiur Rahman and Abdul Mannan have personal relationship developed between the two and Abdul Mannan was able to save his job. Since 2014, Atiur Rahman took the initiative to make the board of directors of the bank free from Jamaat. Then he imposed special control on the bank’s management board. The Central Bank’s approval is mandated for the appointment of the Bank’s second tier of top Executives and Deputy Managing Directors (DMDs). In 2015, the central bank also removed a DMD of this bank on the instructions of the then government.
In this context, the former governor of Bangladesh Bank Atiur Rahman told, “There was no policy for the management of Islami Bank. I made the policy in 2011. As a result, Islami Bank was the best bank during my time. Islami Bank has done best in SME and Agriculture during my time. The changes that have been made then, have been made for the good of Islami Bank.
He said, “What I did, I did in consultation with the then MD Abdul Mannan. S Alam could not enter during my time.
According to another source, when the government planned to take over the bank by freeing it from the Jamaat, Abdul Mannan considered the relatively low losses and allowed the Islami Bank to be taken over by S Alam Group, a big customer of the Jamaat allay. Not only that, Mahbub Alam, Jafar Alam, Monirul Mawla, who are considered to be close to S. Alam, gave important responsibilities of the bank.
Fazle Kabir joined as governor after Atiur Rahman left the central bank in February 2016 in the case of reserve theft. As soon as he arrived, he paid more attention to the implementation of the political decisions of the Sheikh Hasina government and the work of making Islami Bank ‘Jamaat-free’. According to sources, former prime minister Sheikh Hasina’s private investment adviser Salman F Rahman played an important role in appointing Fazle Kabir to the post of governor. He guided S Alam to take over Islami Bank. However, in the beginning, he himself became a partner in possession. In 2016, Mohammad Humayun Kabir, CEO of New Dhaka Industries Limited and Shinepukur Ceramics Limited, owned by Beximco Group, joined Islami Bank as an independent director. The name of Beximco Group came into discussion due to S Alam Group’s debt in the bank. Later, S Alam Group took over the control of the bank by a high-level decision of the government.
At that time there was a rumor in Banking arean that Fazle Kabir became the governor due to the lobbying of Salman F. Rahman and S. Alam.
Islami bank-haters come to board
A month and a half after Fazle Kabir became governor, four people, including former director general of Islamic Foundation Samim Mohammad Afzal, who is known as a controversial and anti-Islamic bank person, were appointed to the board of the bank. This Samim wrote a book criticizing Afzal Islami Bank.
Four new independent directors were approved at the bank’s board meeting held on April 19, 2016, as part of the de-merger process. In the span of four months, i.e. in August 2016, the salary of Jamaat leaders working in the bank was increased by 20 percent. Besides, the new board increased the salary and benefits of Mohammad Abdul Mannan more than twice. MD Abdul Mannan as well as general officers were happy at that time and welcomed the change.
However, internally, the process of removing the Jamaatists started with a golden handshake. The bank’s managing director Mohammad Abdul Mannan was reshuffled in the other top positions as well.
Since then, the board of directors has been vacant on the one hand, and on the other hand, new directors have been appointed directly according to the list sent from the top level of the then government.
However, one of the newly appointed directors raised hundreds of objections to the bank’s audit reports. Allegedly, these were the preparations for the bank takeover.
In addition, during 2016, some newly registered companies that do not exist or only exist on paper started buying shares of Islami Bank. The registration of these companies was taken in 2016. The actual owner of the companies is S Alam Group. The companies are – Excel Dyeing and Printing Limited, Armada Spinning Mills Limited, ABC Ventures Limited, Grand Business Limited, Platinum Endeavors, Paradise International Limited and Blue International.
After buying the shares from the capital market, 20 percent shares of Islami Bank came into the hands of S Alam. Also, as a result, this business group has become an ‘unstoppable player’. Later Saiful Alam Masud, chairman of S Alam Group took control of the bank using power and politics. This is how the board of directors of Islami Bank was completely changed on January 5, 2017 after being under the control of Jamaat for 34 years.
On January 5, 2017, managing director Mohammad Abdul Mannan and chairman of the board of directors engineer Mustafa Anwar were removed and former secretary Arastu Khan was appointed as chairman. Abdul Hamid Miya, MD of Union Bank was appointed as MD. It is alleged that on that day Abdul Mannan was picked up from Paribagh’s house by some officials of a powerful intelligence agency of the government. Similarly, the chairman and vice chairman of the bank were also brought from their homes. Then they were forced to sign the resignation letter.
Highlighting this issue, recently the former Managing Director of Islami Bank Abdul Mannan said in the media that on that day (January 5, 2017) the top officials of Bangladesh Bank worked till late night. They worked to quickly complete the change of ownership of the bank on the same day.
A few days after the change of ownership in 2017, 13,000 bank officials and employees were sent away due to their involvement with Jamaat. Since then, S Alam Group started withdrawing money from the bank through various anonymous companies, and a part of this money was smuggled abroad. In this case also the help of central bank is taken.
Sources claim that the bill to extend the tenure of Fazle Kabir by two years was passed in Parliament to continue the trend of withdrawing money from Islami Bank. At that time, many people referred to this incident as a ‘rare incident’. During the tenure of Fazle Kabir, S. Alam got the opportunity to divert money from Islami Bank to other banks and financial institutions. Not only that, the name of Fazle Kabir NRB Global Bank was changed to ‘Global Islami Bank’ and the name of Reliance Finance was changed to ‘Aviva Finance’ to enable the transfer of money. Among them, the chairman of Aviva Finance was Saiful Alam, the chairman of S Alam Group. Bangladesh Bank then made the two banks ‘Islamic’ under special consideration. Both documents were signed by the then Governor of the Central Bank, Fazle Kabir. After that, the door was opened to take money from Islami Bank to these two institutions.
According to the information of Bangladesh Bank and Islami Bank, about Tk 8,425 crores of Islami Bank is stuck in various banks and financial institutions.
When Fazle Kabir’s term expired in July 2022, Abdur Rauf Talukdar, who was on S Alam’s ‘preferred list’, was installed as the governor on 4 July. Sources claim that S Alam’s interest waiver and loan fraud continued under the supervision of Abdur Rauf Talukdar. Abdur Rauf Talukder, who is absconding, has also been accused of dollar scam in connection with withdrawal of money from Islami Bank. This governor helped S Alam to loot around Tk 5000 crore before escaping.
According to the information of the Central Bank, Bangladesh Bank handed over Tk 6,490 crore to S. Alam through Islami Bank without paying $450 million to the Central Bank. Allegedly, this ultimately benefited Islami Bank’s then-controlling controversial S Alam Group.
A concerned official of the central bank alleged that former governor Abdur Rauf Talukder along with high-ranking officials of the forex reserve and treasury department of the central bank were involved in this fraud to give an opportunity to Islami Bank.
The current governor of the central bank Ahsan H Mansoor termed the incident as ‘unwanted’ and said that the money was coordinated.
According to Central Bank documents, Bangladesh Bank paid Tk 6,490 crore to Islami Bank in exchange for $550 million on July 3 this year when Abdur Rauf Talukdar was the governor of Bangladesh Bank. $550 million dollars were added to the reserves in the central bank on paper, although not deposited in reality. Bangladesh Bank then bought every dollar at the rate of Tk 118.
However, according to the data of the central bank, the reserve was $25.92 billion at the end of July. After the fall of Sheikh Hasina’s government, the Central Bank’s Forex Reserve and Treasury Management Department took the initiative to coordinate the remaining $450 million on August 11. In this, Tk 5,310 crores equivalent to $450 million were deducted from Islami Bank’s current account.
In this context, a top official of the central bank said that the agreements with Islami Bank were made following the instructions of former governor Rauf Talukder. Islami Bank has already been fined three million dollars for non-payment.
Officials of the bank say that since the takeover of Islami Bank S Alam Group, all the loans have gone back and forth in the pockets of that group. The group took out most of the loans illegally.
According to the information of Islami Bank, at the end of June of this year, the debt status of Islami Bank stood at Tk 1 lakh 74 thousand 760 crores. Of this, S Alam Group alone took Tk 1 lakh 6 thousand 446 crores. However, Islami Bank’s newly appointed chairman, Obaid Ullah Al Masud, said that the S Alam Group alone took more than half of the money that the bank distributed as loans. He said, “The full account of these loans is still being worked out.”
He also said, “The Chittagong group looted the money of the bank without following the rules. Assets pledged against S Alam’s loans are also being revalued. Because the loan has been taken out by showing the high price of these assets. As a result, the liquidity crisis in the bank started from 2022.
All appointments outside Jamaat Adarsh
After reviewing, it was found that the new directors appointed after 2015, all of them are outside Jamaat Adarsh. In June 2015, changes were made to the position of Chairman of the Board of Directors. Jamaat leader and former chairman Abu Nasser Muhammad Abduz Zaher was removed from the bank. Then in February 2016, independent director and audit committee chairman NRM Borhan Uddin was dismissed from the bank.
After that, Professor Dr. AKM Sadrul Islam, Barrister Muhammad Belayet Hossain, Md. Abdus Salam, Humayun Bakhtiar, Engineer Iskandar Ali, Dr. Abdul Hamid Fuad Al Khatib, Md. Abul Hossain, Nasser Ahmad Al Khondaker and AHG Mohiuddin. Director General of Islamic Foundation Samim Mohammad Afzal, Professor Syed Ahsanul Alam, Chairman of Marketing Department of Chittagong University, former MD of Pubali Bank Helal Ahmad Chowdhury and M Azizul Haque were removed. Although eventually M Azizul Haque was also removed.
Then the former BDBL MD Zillur Rahman, former Additional IGP Abdul Mabud, Professor Professor Dr. Kazi Shahidul Alam and Borhan Uddin Ahmed, a member of the Central Procurement Technical Unit of the Ministry of Planning. Similarly, Major General (retd.) Engineer Abdul Matin, was appointed. Saiful Islam, Professor Dr. Md. Sirajul Karim, Lawyer Mizanur Rahman, former DMD of Rupali Bank Zainal Abedin. S. Alam was placed on the board of the bank – the current president. Sahabuddin Chuppu too. He was appointed director of the bank in June 2017 on behalf of Chittagong’s JMC Builders and held the position of vice chairman until becoming president. And the chairman of the bank was Ahsanul Alam, son of Saiful Alam, chairman of S Alam Group.
‘A model of bank robbery’
The Governor of Bangladesh Bank has recently commented that this incident of allowing S. Alam to commit crimes by occupying Islami Bank is a ‘model of bank theft’ in the world. Ahsan H. Mansoor. In a press conference at Bangladesh Bank on August 28, he said that S Alam is the first person in history, who has committed bank robbery using state machinery. This is the first case of bank robbery using state machinery in such a well-planned and extensive manner. There is no such case of using the banking system to withdraw people’s money anywhere in the world.
Contacting former governor Fazle Kabir and Abdur Rauf Talukder to know about various allegations, neither of them could get a statement.