BSEC freezes S Alam, allies' stakes in six banks

Infographic: TBS

1. Islami Bank 30.5% of the total shares worth Tk2,050 crore
2. First Security Islami 24% of the total shares worth Tk208 crore
3. Social Islami Bank 19% of the total shares worth Tk221 crore
4. Global Islami 32.6% of the total shares worth Tk215 crore
5. Union Bank 32.7% of the total shares worth Tk230 crore
6. Bangladesh Commerce Bank , not publicly listed yet

The Bangladesh Securities and Exchange Commission (BSEC) has ordered the country's stock exchanges and the Central Depository Bangladesh Limited to freeze the shares of six banks held by S Alam and his associates.

The securities regulator earlier in the day was instructed by the central bank to freeze their shares at Islami Bank Bangladesh, First Security Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank, and Bangladesh Commerce Bank so that they cannot buy, sell or transfer the shares without prior approval.

The Bangladesh Bank found each of the directors at the six banks, be it individual shareholders or firms sending nominated directors, are linked to the country's most controversial entrepreneur Mohammed Saiful Alam, popularly known as S Alam.

Allegations of financial crime against S Alam were already in place before the Hasina government fell. However, following the government's ousting, further accusations have emerged against the former mid-level entrepreneur who, over the past decade, rose to prominence as a banking giant with the support of the Hasina administration.

Using corruption and influence over regulators and government agencies, he is accused of taking control of several banks, including six major ones, and syphoned billions of dollars in depositors' money through fraudulent loans. 

During Sheikh Hasina's regime, no supervisory body or official questioned his actions.

However, under the new interim government, the central bank wrote to the BSEC that the names of S Alam's proxy shareholders of the banks are its primary findings and the list might expand. 

Of the six banks, all but the Bangladesh Commerce Bank are listed with the stock exchanges and public shareholders of the banks are demolished by the massive looting. 

According to the Dhaka Stock Exchange (DSE), the shares at the five listed banks to be frozen are worth over Tk2,900 crore at present market value as revealed in the instant screening. 

The directors named in the freezing order collectively hold over 30% of the Islami Bank Bangladesh shares that were valued at Tk2,050 crore as per the closing price on Tuesday. 

JMC Builders, Paradise International, ABC Ventures, Excel Dyeing, Platinum Endeavors, Excelsior Impex Company, Grand Business, Lionhead Business Resources, BLU International, Armada Spinning Mills, Kingsway Endeavors, Uniglobe Business Resources are the firms S Alam used as shell companies to control the first Shariah-compliant bank in the country, which is also the largest private sector lender. 

Upon receiving complaints from some other shareholders, central bank officials suspect S Alam through his proxy individuals or shell companies might have acquired more shares at the banks and the central bank is investigating to learn about those, according to sources. 

Stock exchanges' primary screening found that 32.58% shares of Global Islami Bank shares worth more than Tk215 crore being held by Maimuna Khanam, Shah Amanat Prakritik Gas Company, Global Trading, Hasan Abasan, Modern Properties, Bangladesh Petro Chemicals, Karnaphuli Prakritik Gas, Fatehabad Firm, Prasad Paradise Resorts, Portman Cements, Unitex Tyre and Wesco Limited got locked in the capital market. 

Around 24% shares of First Security Islami Bank worth Tk208 crore in the names of Mohammed Saiful Alam himself, Mohammed Abdul Maleque, Farzana Parveen, Atikur Nessa, Rahima Begum, Milkway Impexco and Sharmin Fatema got stuck. 

Also, 19% of the Social Islami Bank shares worth Tk221 crore being held by Dynamic Ventures, Arshadul Alam, Unitex Steel, Reliable Entrepreneurs, Unitex Cernent, Global Trading Corporation, Lion Securities & Investment, Prasad Paradise Resorts and Percepta Endeavors were stuck. 

At the Union Bank, nearly one third of the shares worth Tk215 crore is being held by the S Alam cartel.