Direct loan Tk 561.18 billion – Deposit Tk 20.38 billion
Indirect loan Tk 75.24 billion – Deposit Tk 14.35 billion
Loan in interest Tk 94.71 billion – Deposit Tk 8.86 billion
After taking control of the Islami Bank Bangladesh, the S Alam group and several companies in its interest took out a loan of a total of Tk 731.13 billion from the bank, which is almost 50 per cent of the bank’s total loan. However, the value of the assets deposited against the loan was only Tk 43.59 billion.
The Islami Bank is conducting a survey at the moment. At the same time, the central Bank and the Bangladesh Financial Intelligence Unit (BFIU) are also conducting investigations. The information is obtained from their reports.
The scam involving the S Alam Group and the way it looted such a huge amount of money is already considered the biggest financial scam in the history of the country. And it happened with the direct backing of the then government of Bangladesh Awami League, headed by Sheikh Hasina.
Sources in the Islami Bank say the rules and laws of the financial sector were greatly ignored in terms of loan disbursement.
The Chattogram based S Alam Group, which is known to be very close to former prime minister Sheikh Hasina, took control of the bank in 2017. Some then officials of the Directorate General of Forces Intelligence (DGFI) helped the group take over the bank.
After that, the group brought changes in the governing body of the bank and started withdrawing money in many ways. At the same time, it approved loans for its sister concerns too. However, the amount of deposits against the loans never fulfilled the requirements as per the rule.
The Bangladesh Bank dissolved the governing body of the bank following the fall of the Awami League government. Now the bank is not getting any repayment of these loans. As a result, the bank is still facing a liquidity crisis. It is the biggest bank in the private sector. So it has affected the entire banking sector.
S Alam Group chairman Saiful Alam was from Patiya in Chattogram. He embarked upon a business by opening a company in his own name in 1985. He started a transport business named S Alam Paribahan in 1988.
A review of documents showed the S Alam Group took Tk 561.18 billion in direct loans from the Islami Bank against the collaterals worth Tk 20.38 billion while the conglomerate received Tk 75.24 billion in indirect loans from the bank against the collateral, worth Tk 14.35 billion.
On the other hand, S Alam Group-interest loans amounted to Tk 94.71 billion against the collaterals of Tk 8.86 billion. Lands, factories, bank shares and cash were shown as collateral.
A bank can lend a maximum of 50 per cent of the share a director holds. In the case of Islami Bank, the lending ceiling to a company was Tk 5 billion.
Officials at the Islami Bank said apparently these loans are not being recovered. Since banks started recording the actual amount of loans following the formation of the interim government, the defaulted loans at the Islami Bank rose by Tk 100.27 billion in three months to 177.51 billion at the end of September from Tk 77.24 billion in June.
Banking sector analyst and former president of the Association of Bankers, Bangladesh (ABB), Anis A Khan told Prothom Alo that corruption spread from top to bottom. That is why half of the loans by this bank went to the pockets of one individual. State agencies were also used for bank takeovers.
It is really difficult for the bank to bounce back by healing the scars of corruption, he added.
Direct loans
Analysing documents, it is found that 22 companies of S Alam Group have taken loans. The ownership of these companies includes Saiful Alam, along with his wife Farzana Parveen, son Ahsanul Alam, and son-in-law Belal Ahmed.
Moreover, Saiful Alam’s brothers, sisters, and other family members also have shares in these companies.
Mainly, he has involved almost all of his family members in the loan cycle. As a result, following the government’s fall after the mass movement, everyone has either fled the country or went into hiding.
The company that has taken the largest loan from Islami Bank is S Alam Super Edible Oil, with the amount being Tk 118.12 billion, while the collateral is just Tk 620 million.
S Alam Refined Sugar Industries has taken loans of Tk 117.60 billion, but no collateral is provided. S Alam Vegetable Oil has a loan of Tk 91.06 billion, with collateral valued at Tk 420 million. Chemon Ispat Limited has a loan of Tk 35.22 billion, with collateral worth Tk 220 million. Saiful Alam’s mother, Chemon Ara Begum, who passed away last October, was also involved in these businesses.
Among the direct loans, Saiful Alam’s son Ahsanul Alam has a loan of Tk 27.34 billion for Infinia CR Strips, with collateral valued at Tk 180 million.
Infinia Synthetic Fiber has a loan of Tk 5.05 billion, with collateral worth Tk 290 million. His son-in-law Belal Ahmed’s Unitex Composite has a loan of Tk 13.49 billion, with collateral valued at Tk 410 million.
Unitex LP Gas has a loan of Tk 15.15 billion, with collateral worth Tk 420 million. Unitex Steel Mill has a loan of Tk 6.73 billion, with collateral valued at Tk 16.5 billion. These loans were provided by Islami Bank branches in Chattogram’s Khatunganj, OR Nijam Road, Pahartali, and the Gulshan-1 branch in Dhaka.
Loans taken indirectly and by companies of interest
Nabil Group took the loans of Tk 77.52 billion against the collateral worth Tk 14.35 billion, but S Alam Group is the indirect beneficiary of these loans.
Loans related to companies of interest of S Alam Group stood at Tk 94.71 billion against the collaterals worth Tk 8.86 billion. Seven companies received indirect loans from the bank’s Rajshahi branch and two companies received from the Gulshan branch. These companies received Tk 60.64 billion in loans against the collateral of Tk 10.88 billion.
Besides, other loans in S Alam Group's interests also include Tk 15.31 billion to AJ Trade International, Tk 11.22 billion to Product Palace and Tk 11.18 billion to Anowara Trade International. These loans were disbursed from the bank’s Rajshahi branch with no collateral.
Zaman Syndicate received loans of Tk 11.27 billion from the Pabna branch against the collaterals worth Tk 250 billion; Sultan Associates received Tk 11.23 billion in loans against the collaterals of Tk 150 million. Besides, Islami Bank marked Tk 13.03 billion in loans to Deshbondhu Group and Anontex Group as the loans in S Alam Group's interest.
Prothom Alo could not reach Islami Bank chairman Obayed Ullah Al Masud and managing director Mohammed Monirul Moula for comments.
Former chief economist of Bangladesh Bank and executive director at the Institute for Inclusive Finance and Development (InM), Mustafa K Mujeri told Prothom Alo that monitoring must be strengthened to recover these defaulted loans. Besides, initiatives must be taken to regularise the loans by keeping the companies that are on the verge of being defaulted running because if factories are closed the country will face big losses, he added.