Before the last parliamentary elections, an unusual transaction occurred in a private Union Bank account. The account was opened a year prior to the election, and cash was deposited.
In December of the previous year, cash withdrawals began, totaling approximately 720 million taka before the election. Although the account was opened at the bank's Banani branch, most withdrawals took place at the Gulshan branch, located near the head office. This information emerged during a review of Union Bank’s documents.
The account was registered under a company named Mostak Traders. However, it was closed on 20 August, following the fall of the Awami League government due to a student uprising.
The account was opened on 15 November 2022 at the Banani branch of Union Bank. On the same day, Tk 255.7 million was deposited through 17 transactions. Among these transactions, Tk 20 million was deposited four times, and Tk 15 million was deposited five times. The remaining funds were deposited in various amounts. The following day, 16 November, Tk 100 million was deposited in seven transactions
Notably, all information related to the account has been deleted from the bank's online database. Despite the account’s closure, it is unlikely that all data has been permanently erased. A high-ranking official confirmed to Prothom Alo that several other accounts in Union Bank have also had their information deleted.
Additionally, a loan of Tk 550 million was issued from Union Bank's Dilkusha branch to the owner of this enigmatic account, which has now defaulted. This correspondent could not locate any evidence of the company at the address used to open Mostak Traders' account.
Bank officials reported that they witnessed numerous candidates and their supporters withdrawing money from this account prior to the elections. This list included figures from various fields, such as cricket and film, ranging from newcomers to seasoned candidates.
According to the officials, these funds were perceived as a gift from the then-government to cover election expenses, provided to Saiful Alam, chairman of the S Alam Group.
It is evident that this anonymous account was opened for election purposes, and it served that function. Such accounts cannot be opened or closed without the directive of the Bank MD. An investigation should be conducted to determine who accessed the funds from this account, and efforts must be made to recover the money through legal channelsMustafa K Mujeri
To facilitate this, anonymous loans were taken from other banks owned by him, including Union Bank. Ever since it was founded in 2013, Union Bank was controlled by the S Alam Group, which is known for its bank grabbing.
Following the political change, Bangladesh Bank dissolved the board of directors of Union Bank, along with several other banks controlled by S Alam. As a result, these banks are now facing a liquidity crisis, with many clients unable to retrieve their deposits.
This correspondent visited the bank’s head office multiple times in an attempt to obtain a statement from Union Bank's Managing Director (MD), ABM Mokammel Haque Chowdhury, regarding the alleged Mostak Traders accounts, but was unable to meet with him. Attempts to reach him by phone were also unsuccessful.
When asked for comment, Bangladesh Bank's former chief economist, Mustafa K. Mujeri, told Prothom Alo, "It is evident that this anonymous account was opened for election purposes, and it served that function. Such accounts cannot be opened or closed without the directive of the bank MD.
"An investigation should be conducted to determine who accessed the funds from this account, and efforts must be made to recover the money through legal channels. Now is the time to arrest those involved in these misdeeds. If they flee, vital information will be lost, and no legal action will be taken to recover the funds."
Opening account and making transactions
The account was opened on 15 November 2022, at the Banani branch of Union Bank. On the same day, Tk 255.7 million was deposited through 17 transactions. Among these transactions, Tk 20 million was deposited four times, and Tk 15 million was deposited five times.
The remaining funds were deposited in various amounts. The following day, 16 November, Tk 100 million was deposited in seven transactions.
An official associated with the opening of this account told Prothom Alo that it was created at the direction of S Alam's personal secretary, Akiz Uddin, and the bank's MD, ABM Mokammel Haque Chowdhury, without verifying the identity of the account holder. This account was later used for financial transactions during the elections.
On 17 November 2022, the customer submitted a demand letter requesting two cheque books. Additionally, Tk 100 million was deposited six times. On 20 November, Tk 200 million was deposited, followed by another Tk 200 million on 21 November. On 8 December, Tk 15 million was deposited six times. After that, there were no transactions for a year.
Cash withdrawals from this account began on 10 December 2023, and continued until 9 January, 2024. On 10 December, Tk 25.1 million was withdrawn in a single check from the Banani branch, and Tk 10 million was withdrawn from the Gulshan branch on 14 December.
Subsequently, all withdrawals were made from the Gulshan branch, including Tk 410 million withdrawn on Thursday, 28 December. This amount comprised a withdrawal of Tk 100 million, Tk 60 million in individual checks, and Tk 50 million across five checks, totaling Tk 250 million.
On 3 January 2024, Tk 17.5 million was withdrawn. The twelfth national parliament election took place on 7 January, and on 9 January, the entire remaining amount of Tk 250 million was withdrawn from the account through five checks.
Following the last transaction, the account was closed. On 15 August, Tk 432,000 was withdrawn via pay order, and the account was officially closed on 20 August. Subsequently, all account information was deleted from the bank's database. Reports indicate that the information technology department removed this data at the directive of the bank's MD. Notably, despite established rules for cash withdrawals, there was no requirement to submit a copy of the national identity card at the Gulshan branch.
In September 2021, central bank officials discovered a discrepancy during an inspection of the vault at Union Bank's Gulshan branch, finding approximately Tk 190 million less than what was documented. However, Bangladesh Bank did not take any action regarding this shortfall.
According to the rules set by Bangladesh Bank’s Financial Intelligence Unit (BFIU), banks are required to submit a Cash Transaction Report (CTR) for any account holder making transactions exceeding Tk 1 million and a Suspicious Transaction Report (STR) for any sudden or unusual activity. However, it has been reported that Union Bank failed to comply with these regulations concerning the Mostak Traders account.
Modasser Hossain, the current manager of the Banani branch, informed Prothom Alo that he is new to the position and that there is no account in the name of Mostak Traders at his branch.
Meanwhile, a loan of Tk 550 million was withdrawn from Union Bank's Dilkusha branch in the name of Mostak Traders in December 2022 and March of the following year, all of which have since defaulted.
What was found in the address
The address of Mostak Traders listed in the bank records is House No. 96, Aga Sadek Road, Bangshal, Old Dhaka. It was observed last Wednesday that the ground floor of that building houses several shops, including Ma Traders, Medina Traders, and Alik Department Store. However, the owners of these shops stated that there has been no company called Mostak Traders operating there for the past 25 years.
On 28 August, Prothom Alo published a report about the company of Salam's PS being worth billions, noting that the Bangladesh Financial Intelligence Unit had blocked Tk 150.4 million associated with Mostak Traders and PS Akiz Uddin.
Following this, the owner of Mostak Traders, Muhammad Mostak Mia, sent a protest letter to Prothom Alo, claiming that Mostak Traders has no connection to S Alam Group or Akiz Uddin. Although no phone number was provided in the protest letter, it included the address of 16 Aga Sadek Road, Bangshal.
Interestingly, the name on the letter was Mostak Miah, with the address listed as Charira Para, Chauhumni, Agrabad, Chittagong.
Upon investigation last Thursday, it was found that 16 Aga Sadek Road, Bangshal is a dilapidated house located across the lane, and there is no company called Mostak Traders at that address.
Noor Mohammad and his brother Ibrahim Mostak, who own M & Brothers at 18/3 Agha Sadek Road, have been trading cotton there for about 30 years. They confirmed that they have no debts with any banks, although Ibrahim Mostak opened an account with Islami Bank 20 years ago.
A senior official from Islami Bank informed Prothom Alo that their bank was entirely unprotected for seven years under S Alam's control. The official noted that it would not be surprising if the group had used depositor information to secure loans from other banks during that time, a serious financial crime.
Union Bank’s condition
Nine banks were approved in 2012 during the government of Prime Minister Sheikh Hasina, who later fell from power in a student-led mass uprising. These approvals were granted by Bangladesh Bank largely due to political considerations, with Union Bank being one of them.
Although the S Alam Group was behind the bank's founders from the outset, Jatiya Party founder Hussain Muhammad Ershad and secretary general Ziauddin Bablu were publicly positioned as front figures. At that time, the Awami League and Jatiya Party were in a coalition government.
Shahidul Alam, a brother of Saiful Alam, became the bank's chairman at its establishment in 2013. The former Director General of the Defense Intelligence Agency (DGFI), General (Retd.) Mullah Fazle Akbar, served as the vice chairman.
Saiful Alam's brother, Rashedul Alam, along with Osman Gani, and Saiful Alam's son, Ahsanul Alam, and son-in-law, Belal Ahmed, held various positions as chairman and directors over the years. Bank MD Mokammel Haque Chowdhury is known as an associate of Saiful Alam in allegations of bank grabbing, money looting, and money laundering.
Former MD of Exim Bank, Farid Uddin Ahmed, is now the chairman of Union Bank. He stated that Bangladesh Bank had informed the bank via letter that the S Alam Group alone had taken loans amounting to Tk 180 billion from Union Bank, accounting for 64 per cent of the bank's total loans.
These loans were reportedly obtained through fictitious transactions, often lacking adequate security. Internal documents revealed that 42 per cent of the bank's total loans are currently in default.
In response to inquiries, Chairman Farid Uddin Ahmed told Prothom Alo, "I have recently taken charge. I am seeing exactly what is reported in the newspapers. Bangladesh Bank is investigating, and they will determine the real circumstances. However, to ascertain the extent of the loans taken, a forensic audit is essential."
As part of banking sector reforms, the central bank has changed the board of directors of Union Bank. Nonetheless, S Alam's influence within the bank remains significant, leading to challenges for the central bank in uncovering the true condition of the institution.
Mustafa K Mujeri commented that if the newly reconstituted board does not perform effectively, it should be replaced. Otherwise, this burden will only increase. Law enforcement agencies, including the Anti-Corruption Commission, must take prompt action, he emphasised.
*This report, originally published in Prothom Alo print and online edition in Bangla, has been rewritten in English by Farjana Liakat