Going beyond P K Halder’s statement to Indian ED, Northeast News finds evidence that strong-arm tactics were used to takeover Social Islami Bank as Awami League government watched on.
Social Islami Bank Ltd (SIBL). (Photo:homnacomilla.blogspot.com)
He had proceeded no more than 500 metres when a car pulled over and a few burly men in civilian clothes walked up to him and said, “You have to come along with us”. He did not protest and meekly went along to take a place in the rear seat of the air-conditioned car.
The car raced along Mirpur Road before it pulled over next to a house on nearby Elephant Road. Here he was handed a suit and a tie before the party reached Westin Hotel in Gulshan. When he was ushered into a room in the hotel, he was stunned to see other SIBL directors gathered together, clearly tense. Meanwhile, a plain-clothed men passed around a tray and asked the nine men to turn off their mobile phones and place them on it.
A few other men present in the room passed around some typed documents among the SIBL directors who were next instructed to sign on the papers. “We were signing away our shares,” recalled a senior SIBL executive describing the “more-than-hostile takeover” of SIBL by the much-feared Directorate General of Forces Intelligence (DGFI) acting at the behest of the “predator” businessman, Mohammad Saiful Alam. Alam had earlier allegedly effected control the profitable Islamic Bank in December 2016 and, after taking over SIBL, would go on to gain full control over four other banks.
Alam’s massive business dealings, which are operated from Chittagong, Dhaka, British Virgin Islands, Singapore, Cyprus and Dubai, are in commodities trading, finance, power, engineering, energy and media among others. A litany of Alam’s alleged dubious dealings was made in May 2022 by Proshanta Kumar Halder, a former managing director at Reliance Finance Ltd, to the Indian Enforcement Directorate (ED). During his interrogation, Halder told ED officials that Alam paid kickbacks to the tune of Taka 1,500 crore to Bangladesh Prime Minister Sheikh Hasina’s son Sajeeb Wazed Joy in 2014.
Halder went on to reveal to the ED that the banks over which Alam “has effective and full control” are the First Security Islami Bank Ltd, Union Bank Ltd, Global Islami Bank Ltd (earlier known as NRB Global Bank Ltd), Social Islami Bank and the Islami Bank Bangladesh Ltd. In this context, Halder alleged that “the total credit exposure of the Bangladeshi banks to Md. Saiful Alam and entities (including dummy ones), managed and controlled by him and his family members, comes to around Taka 120,000 crore… It is reiterated that majority of this loan amount has been taken through dummy firms with no real business on the ground”.
Highly-placed Bangladesh government sources said that Alam’s takeover of the six banks was “very ably” backed by a clique of top DGFI officers, senior bureaucrats and highly-placed Bangladesh Bank executives. However, the case of SIBL was “much too glaring”. While media reports of the time do not highlight the involvement of the nexus comprising top DGFI officers, bureaucrats and Bangladesh central bank executives, they do indicate that due process was not followed in the “mysterious” way that SIBL was taken over.
For instance, a Dhaka Tribune report of October 30, 2017, said, “The decision to remove the top three of the senior management and the announcement on their replacements was made at a closed door meeting of the bank’s board of directors at The Westin hotel in Dhaka under tight security…The changes in high level management at SIBL…are allegedly being backed by Chittagong-based S Alam Group that bought up shares of both banks prior to the takeover”. The S Alam Group reportedly bought up SIBL shares by using no less than 18 companies.
Media reports of the time suggested that SIBL chairman Major (retd) Mohammad Rezaul Haque resigned “amid allegations of terror financing, money laundering and corruption” and that “the bank’s executive committee chairman Md Anisul Huq and managing director Shahid Hossain also quit on the same grounds”. Curiously enough, despite these serious charges, no arrests were made.
Well-placed Bangladesh government sources now reveal to Northeast News that while the nine SIBL directors were taken to Westin Hotel, Hossain, who was managing director at SIBL for only eight months, was whisked away from his residence and taken to a place in Dhaka’s Kochukhet area where the DGFI’s headquarters are located. Since that day and even later Hossain was “instructed” and reminded several times by the DGFI to not discuss the SIBL takeover with anyone.
Hossain subsequently moved to join Dhaka-based Bengal Commercial Bank Ltd in 2022 as an advisor and has since retired. Major (retd) Rezaul Haque was booted out and his dues were not even paid by SIBL under its new leadership. He reportedly lives in obscurity in the UK.
Investigations by NE News reveal that essentially two former DGFI directors-general (both of whom commanded the crucial 9th Infantry Division), a top bureaucrat in the prime minister’s office, a military secretary to PM Sheikh Hasina and a top executive of Bangladesh Bank backed Saiful Alam in his quest to takeover some of the banks. In fact, Bangladesh government sources disclosed that the then Bangladesh Bank governor Fazle Kabir presided over a brief midnight drama when Major (retd) Rezaul Haque was forced to resign. Over time, the two DGFI chiefs are said to have built palatial homes in Dubai and Bangkok. One of them is said to have transferred huge amounts of money from a Dubai bank to his daughter’s account in an American bank.
These sources disclosed that much “pressure” was directly borne by the then Bangladesh Bank deputy governor S K Sur Chowdhury who is said to have later gone into hiding after vacating his official residence on Dhaka’s Minto Road. In July 2021, the Bangladesh National Board of Revenue (NBR) instructed banks to freeze the accounts of Sur Chowdhury and his wife. It is learnt that the NBR Central Intelligence Cell shot off letters to managing directors and CEOs of some banks, ordering them to freeze all banking transactions related to the Sur Chowdhurys.
This move, according to reports, was part of a wider investigation into irregularities at the Bangladesh Industrial Finance Company (BIFC) and a few other non-banking financial institutions. In February 2021, the Bangladesh Bank set up a committee to probe the irregularities at BIFC and how it might have helped benefit Proshanta Kumar Halder. Sur Chowdhury, along with the then BIFC executive director Shah Alam were alleged to have assisted Halder in misappropriating and embezzling Taka 5,500 crore from at least five financial institutions.
Speaking to Northeast News, Dr Ahsan H Mansur, one of Bangladesh’s top economists, director of the Policy Research Institute and chairman of BRAC Bank Ltd, said, “The powerful countries, whose attention is drawn on Bangladesh, should be focused on its national interest and not regime interest. The banking sector is in serious trouble and most of the non-banking financial institutions are seriously illiquid. It is not just a case of one person but others too are responsible for the situation that the banking sector finds itself in. The lack of regulatory oversight stems from the lack of support from the political process”.
