Aviva Finance Ltd also freed from S Alam Group’s grip

Aviva Finance Limited, a Shariah-compliant financial institution, has been freed from the control of the controversy-hit S Alam Group, following the cancellation of its board of directors.

A new five-member board has been appointed for the non-bank financial institution (NBFI), the central bank said in a letter to the Managing Director of the Md Mostafiduzzaman.

Md Sadrul Huda, FCA, has been made the chairman of the Board of Directors.

Other independent directors appointed in the company are - Md Golam Mostafa, former executive director of the Bangladesh Bank; Dr HM Mosarof Hossain, chairman, finance department of the Dhaka University; Md Rafiqul Islam, former deputy managing director of Agrani Bank and Abu Taher Md Ahmedur Rahman, former deputy managing director of Investment Corporation of Bangladesh (ICB).

In the letter by the central bank, it stated that the financial institution violated section-15 (11) of the Finance Companies Act, 2023 through a slew of infractions such as the formation of the board without the Bangladesh Bank's permission, sanctioning loans/investments of more than Tk1cr despite central bank ban and deterioration of financial indicators among others.

The Board is dissolved as per Section 20(1) of the Act, the letter stated.

Besides, the new board has been advised to take necessary measures to appoint a chief executive officer within the shortest period of time.

Saiful Islam, chairman of S Alam Group, was the chairman of the board of directors of Aviva Finance. 

However, the company itself brought changes to the board of directors as the news of taking loans irregularly appeared in various media.

Earlier in the day, the banking regulator also reconstituted the boards of Al-Arafal Islami Bank and Bangladesh Commerce Bank- both controlled by the S Alam group. 

A total of nine banks and financial institutions have been freed from the S Alam Group's grip. The group has been accused of smuggling loans from various banks.