The High Court has ordered a three-month freeze on 81.92 per cent of Islami Bank Bangladesh PLC shares held by 24 companies linked to S Alam Group.
The order came following a writ petition filed by the Islamic Economic Research Bureau (IERB), a sponsor shareholder institution of Islami Bank, alleging that S Alam illegally acquired and consolidated control of the bank through these entities.
A High Court bench comprising Justice KM Kamrul Kader and Justice Md Lutfar Rahman issued the rule and interim order on 30 August.
The court asked authorities to explain why Bangladesh Bank’s inaction over the alleged concentration of 81.92 per cent of Islami Bank’s shares through the 24 companies, in violation of Sections 14A and 14B of the Bank Company Act 1991, should not be declared illegal.
It also sought an explanation on why the central bank’s failure to take steps to confiscate the shares under Section 14(3) of the Act should not be declared unlawful.
Under the Bank Company Act, no individual, family or group can hold more than 10 per cent of a bank’s shares. The writ petition stated that 24 institutional shareholder companies associated with S Alam collectively held 81.92 per cent of Islami Bank’s total shares, exceeding the legal limit.
As part of the interim order, the High Court directed that the shares held by the 24 companies remain frozen for three months. Advocate Mohammad Shishir Manir represented the petitioner during the hearing.
Islami Bank, the country’s largest private bank, came under S Alam Group’s control on 5 January 2017 following what was described as a high-level political decision by the then Awami League government and direct intervention by the Directorate General of Forces Intelligence (DGFI).
On that day, the bank’s then chairman, vice-chairman and managing director were allegedly detained at a Dhaka hotel and forced to sign resignation letters.
The S Alam Group later gained control of nearly 81.92 per cent of the bank’s shares through 24 paper-based and related entities, allegedly bypassing provisions of the Bank Company Act. The group has also been accused of withdrawing nearly Tk1 lakh crore in loans through various entities.
Following the fall of the Awami League government, steps were taken to remove S Alam’s influence from the bank and investigate allegations of irregularities.
Bangladesh Bank dissolved the previous board of directors and formed a new board. The Bangladesh Financial Intelligence Unit (BFIU) also froze bank accounts belonging to S Alam, his family members and affiliated entities.
Meanwhile, the Anti-Corruption Commission (ACC) and other state agencies launched investigations into allegations of money laundering and corruption.
The latest High Court order is part of a series of legal measures involving S Alam’s control over Islami Bank.
Several senior officials associated with S Alam at the bank have also been removed, while directors allegedly linked to irregularities have been barred from leaving the country without court approval.
Several valuable assets owned by S Alam abroad have also been seized.
