Transcom Group heirs in conflict over 'Tk10,000cr wealth'

Transcom Group, once hailed as a model of a compliant business conglomerate in the country, is now embroiled in a full-fledged conflict among the second-generation heirs over the distribution of wealth following the passing of its founder, Latifur Rahman.

Shahzreh Huq, the youngest of the two surviving offspring of the iconic businessman, filed three cases on Thursday, accusing her mother Shahnaz Rahman, the current chairman of the group and older sister Simeen Rahman, the current CEO, of breaching trust, committing fraud, and forging documents to deny her and her deceased brother, Arshad Waliur Rahman, their "rightful" portion of the family's wealth, claimed to be worth Tk10,000 crore.

A total of eight high officials of the group were accused in three cases. Police, in prompt action, arrested five officials accused of colluding with Simeen Rahman and Shahnaz Rahman on the same day.

However, the arrested Transcom employees — Md Fakhruzzaman Bhuiyan, serving as the executive director for Corporate Affairs and Law at the Transcom Group; Kamrul Hasan and Abdullah Al Mamun, both directors in Corporate Finance; Mohammed Mossadeq, the assistant company secretary, and Abu Yusuf Md Siddik, a manager — were freed on bail on Friday, by a Dhaka Metropolitan Court that turned down a Police Bureau of Investigation (PBI) plea for their remand.

Neither Shahzreh Huq nor Simeen Rahman's office responded to a TBS request for comment, while Shahnaz Rahman's office said she was travelling overseas.

A family discord

TBS, however, talked to several current and former Transcom employees alongside friends of Latifur Rahman's family.

Seeking anonymity, they told TBS that Simeen Rahman with her passion and commitment to business emerged as a trusted figure to her father Latifur Rahman, who expressed his desire for her to take the helm of the business before his passing on 1 July 2020.

In contrast, it was noted that Shahzreh Huq and her brother, Arshad Waliur Rahman, who served as the Director of Transcom Group until his passing in 2023, showed little interest in the day-to-day operations of the family businesses and were more focused on their personal lives, they said.

According to three close acquaintances of the family, Latifur Rahman, until his passing, groomed Simeen Rahman as his successor, potentially granting her control over the conglomerate which operates across diverse sectors such as tea, electronics, food and beverages, pharmaceuticals, media, insurance, financial institutions, and distribution.

With her mother's support, Simeen Rahman subsequently acquired an additional 18% stake in Transcom Limited, as outlined in the case documents where Shahzreh Huq claimed that neither she, her deceased brother, nor her father had consented to any agreement allowing one heir to obtain an excessive share, thereby depriving the others.

The case document also says that the plaintiff Shahzreh Huq was informed last year by Transcom officials that she received 4,270 shares, her brother Arshad Waliur Rahman received 4,270 shares, and her sister Simeen got 14,160 shares.

The plaintiff further accused her mother, who was designated as the nominee for Latifur Rahman's Tk100 crore cash assets across various bank accounts, of misappropriating the funds by excluding her and the late Arshad. Moreover, she alleged that Tk60 crore from this amount was utilised to purchase an 18% stake in Transcom Limited from the group's subsidiary, Transcom Electronics, and subsequently transferred to Simeen Rahman.

The accused fabricated the deed documents, Shahzreh Huq alleged in the cases filed with the capital's Gulshan Police Station. She sought her fair shares as per Muslim Succession Law.

Transcom's lawyer AKM Muhiuddin Faruk argued at the court on Friday that the plaintiff Shahzreh Huq had been fulfilling her tax obligations based on the precise sum of inheritance she received from her deceased father, in accordance with the alleged agreement that she now asserts was falsified.

A financial market expert closely associated with the family informed TBS that the current Transcom family conflict had been quietly simmering for years, predating Latifur Rahman's passing. This tension intensified as the elder daughter assumed greater responsibilities and authority within the businesses, particularly following the tragic death of her son, Faraaz Ayaaz Hossain, in the infamous Holy Artisan terrorist attack in 2016.

Some of Latifur Rahman's friends even tried to resolve the dispute between the two sisters last year, especially after the death of their brother Arshad Waliur Rahman who was a divorced man having no child, he said.

Showing no signs of improvement, Shahzreh Huq, seemingly marginalised within the group, has stepped forward to engage in the final struggle for her "rightful inheritance" as the daughter of Latifur Rahman, he added.

The legal clash underscores deep-seated familial divisions, highlighting the complexities of succession and inheritance in the group.

With key figures embroiled in legal proceedings, many see uncertainty in the long-term stability of the group.

The Business Standard has obtained the documents of all three cases, and the following are some of the allegations made in the cases:

Misappropriation of money

In the case documents, Shahzreh wrote that her father had around Tk100 crore as fixed deposit receipts (FDRs) in different banks. Her mother, Shahnaz Rahman, was the nominee for the money.

Shahzreh has alleged that the money was supposed to be distributed among the heirs (waris) according to the Muslim Sharia law after Latifur's demise.

In the case documents, she claimed that her mother (Shahnaz) transferred all the money to her account after her father's death.

Shahzreh also claims that her mother transferred the ownership of 18% shares of Transcom Electronics to herself on 3 August 2020 by showing that she bought them for Tk60-100 crore. She claimed that her sister and mother did it together and, by doing so, had deprived the other two heirs of Latifur of their rights.  

Depriving the heirs of Transcom shares

In another case, Shahzreh claimed her sister, with the help of four other Transcom officials, illegally took ownership of most of the Transcom shares after her father's death by creating three Form 117 (instrument of transfer of shares) and submitting them to Registrar of Joint Stock Companies And Firms (RJSC).

The case document also says that the plaintiff was informed that she received 4,270 shares, her brother Arshad Waliur Rahman received 4,270 shares, and her elder sister Simeen got 14,160 shares.

However, the plaintiff claims she never signed the transfer deed (Form 117) nor did her father. The plaintiff, Shahzreh Huq, alleges that the accused fabricated these documents.

Forgery of Deed of Settlement

In another case, Shahzreh claimed her mother and sister, with the help of three other Transcom officials, made a Deed of Settlement by forging her and her brother Arshad Waliur Rahman's signature.

She claimed the Deed of Settlement was later used by Simeen and Shahnaz to take ownership of Transcom shares and fill the positions of Chairman, Managing Director and Group CEO.

Shahzreh claimed she never had any Deed of Settlement with any of her family members.

Clauses of penal codes mentioned in the cases

The three cases include the following clauses of the Bangladesh Penal Code, 1860: 406, 419, 420, 467, 468, 470, 471.

The 406 clause is a criminal breach of trust with imprisonment of up to three years, a fine, or both. Shahzreh Huq accused both her mother and sister of this.

She also accused both of them of cheating (419), forgery of valuable security/will (467), forgery for the purpose of cheating (468), forged document (470), and using as genuine a forged document (471).

Clause 468 comes with an imprisonment of up to seven years, and 467 up to ten years with a fine.

Transcom Group

According to the website latifurrahman.com, the Rahman family originated from Comilla and entered the business arena in 1885 when Latifur Rahman's grandfather built a tea estate in The Duars. In the 1960s, the family came back to Bangladesh to build the first Bangladeshi-owned jute mill in Chandpur, while they got tea estates in Sylhet in the 1940s in exchange for theirs in West Bengal.

In 1972, after his jute mill was nationalised, Latifur Rahman founded today's Transcom Group that, over the years, emerged to be a partner of many foreign brands eying the Bangladesh market including Philips, Pepsi, Nestle, Pizza Hut, and KFC.

Acquiring the business of several divesting foreign companies like Philips and SK&F made the group even stronger over the years. The group built two top-tier newspapers in the country alongside having stakes in insurance and a non-bank financial institution.

However, with the emergence of faster-growing local competitors in various segments, the businesses seemed to have lagged behind in cashing in the biggest economic boom in the Bangladesh economy over the last 15 years, according to professionals close to the group.

For instance, SK&F grew over time by expanding its pharmaceuticals sales network at home and abroad alongside production capacity, but dropped several notches to the eighth spot in the country's pharmaceuticals industry from the third position a decade ago, according to industry insiders.

According to US-based global research organisation ZIPPIA data, Transcom's annual revenue was $685.1 million in 2023 while it employed over 25,600 people.