Islami Bank Bangladesh PLC (IBBL) has come under pressure after accusing former president Mohammed Shahabuddin in an alleged loan embezzlement case.
In an apparent bid to ease that pressure, the bank suspended the officer who filed the complaint and formed an investigation committee against him, even though the officer had lodged the complaints with the court and the Anti-Corruption Commission (ACC) under written instructions from the bank’s management.
Multiple officials, speaking to TIMES of Bangladesh on condition of anonymity, said Islami Bank had come under “pressure from the government” for including the former president among the accused. As a result, they said, the officer concerned had been made a “scapegoat”.
On Monday, Mohammad Yeasin Ali, FAVP of the Foreign Exchange Corporate Branch, filed complaints against recently departed president Mohammed Shahabuddin, Mohammed Saiful Alam, also known as S Alam, and 36 others over the alleged embezzlement of Tk500 crore through loans. The following day, the bank authorities suspended him and formed an investigation committee against him. He was accused of submitting the complaints to the ACC without approval from the management.
However, Islami Bank documents obtained by TIMES tell a different story. Two official letters dated 27 July show that Islami Bank has decided to file complaints with the ACC and the court against its client Suprov Composite Knit Ltd, its sister concern Galaxy Sweater and others concerned. The documents authorised Mohammad Yeasin Ali to appear before the court and the ACC to file the complaints and conduct subsequent proceedings, following a decision by the management.
The bank reversed its position the day after Yeasin filed the complaints under that authority on Monday.
Asked whether Islami Bank had come under pressure from the government after implicating the former president, Mohammad Zahir Hussain, an executive director of Bangladesh Bank vested with full authority over Islami Bank’s board, said, “I cannot say anything about this matter. I cannot make any comment.”
Documents show that before filing the complaints, Islami Bank had investigated the alleged loan fraud through four audit firms. Those investigations identified various irregularities in the approval and disbursement of the loans as well as the involvement of the accused.
The complaint submitted by IBBL to the ACC alleged that after S Alam Group took control of Islami Bank in 2017, the credit limit of a weak company named Suprov Composite Knit Ltd was fraudulently increased. The company’s credit limit was raised from Tk100 crore to Tk500 crore. The complaint alleged that the accused later withdrew and embezzled the loan proceeds.
Before becoming president, Mohammed Shahabuddin served as a director and vice-chairman of the board of Islami Bank Bangladesh. He joined the board formed after S Alam Group took control of the bank in 2017. It was during that period that Suprov Composite Knit Ltd’s credit limit was increased from Tk100 crore to Tk500 crore.
Asked about Bangladesh Bank’s position on Islami Bank assigning responsibility to the officer and then making him a “scapegoat”, central bank spokesperson and Executive Director Arief Hossain Khan told TIMES, “This is an internal matter of Islami Bank. If the matter comes to the central bank, the authorities will look into it.”
