It was 5 January, 2017. Breaking with convention, a meeting of the board of directors of Islami Bank Bangladesh PLC was being held at the five-star Radisson Blu Water Garden in Dhaka. Around 12 to 13 directors were present.
Suddenly, several individuals entered the meeting room who were not members of the board. One director became irritated upon seeing unfamiliar people walk into the board meeting. He exclaimed, “Hey, who are you people? Why are you here?”
The unfamiliar individuals gave no reply. Nor did they leave the meeting. Several directors and bank officials began whispering among themselves. Shortly afterward, the then director general of the Directorate General of Forces Intelligence (DGFI), Mohammad Akbar Hossain, entered the meeting. Accompanying him was one of the bank’s major clients, Saiful Alam Masud, chairman of the S Alam Group, which he had founded in his own name.
Saiful Alam took a seat on one side of the table. Seated in the three chairs beside him were the then DGFI director general Mohammad Akbar Hossain, the then chairman of Islami Bank Mustafa Anwar, and former Planning Commission member Arastoo Khan.
At that board meeting held that day at the Radisson Hotel—owned by the Sena Kalyan Sangstha—the control of Islami Bank was handed over to the S Alam Group under the supervision of DGFI officials on government instructions. During the meeting, chairman Mustafa Anwar announced that he himself, vice chairman M Azizul Huq, and managing director Abdul Mannan had resigned.
As he spoke of the resignations, Mustafa Anwar’s eyes welled up with tears. At the meeting, Arastoo Khan was elected chairman and Chittagong University professor Syed Ahsanul Alam was elected vice chairman.
In addition, Major General (Retd) Engineer Abdul Matin was made chairman of the executive committee, former BDBL managing director Md Zillur Rahman chairman of the audit committee, and former police official Mohammed Abdul Mabud chairman of the risk management committee.
The meeting had been convened at a five-star hotel outside the bank’s own premises specifically to transfer control of the bank. Before this, however, the S Alam Group had already acquired a large portion of the bank’s shares under various names.
The instructions to arrange the meeting had come from several top DGFI officials at the time. On the morning of the meeting, the chairman, vice chairman, and managing director had been taken to the DGFI office and forced to resign. The chairman was then sent to inform the board about the resignations. The managing director was kept detained.
Not all the other directors were aware of these developments. Because the venue of the board meeting had been changed and arranged at a five-star hotel, some had suspected that something was about to happen. Before entering the meeting, all of their mobile phones had been taken away.
This inside story of the Islami Bank takeover was recounted to Prothom Alo by two former directors of the bank, two senior officials, and another individual who was later given an important responsibility. None of them wished to be identified.
In Bangladesh, the incident was unprecedented. Earlier, on 26 August, 1999, former Awami League industry and commerce secretary Akhtaruzzaman Chowdhury (now deceased) had seized control of the board of directors of United Commercial Bank (UCB) at gunpoint.
Alongside the accounts of these five directors and officials, Prothom Alo also spoke with various sources at Bangladesh Bank, the S Alam Group, and several other organisations and institutions. Gradually, the story behind the bank takeover became clearer.
In Bangladesh, the incident was unprecedented. Earlier, on 26 August, 1999, former Awami League industry and commerce secretary Akhtaruzzaman Chowdhury (now deceased) had seized control of the board of directors of United Commercial Bank (UCB) at gunpoint.
However, there had been no prior instance of an intelligence agency being directly involved in orchestrating a change of bank ownership under its own management.
The incident sparked discussion not only in Bangladesh but also abroad. In April 2017, the influential British magazine The Economist published a report on the matter under the headline: “The Government Initiates a Coup at Bangladesh’s Biggest Bank.”
Meanwhile, after the amendment of the Bank Resolution Act (gazetted on 10 April), which created an opportunity for former owners to return to bank ownership, the story of the bank takeover has once again become a subject of discussion.
Nine years have passed since the incident. Following the July mass uprising, the Awami League government fell on 5 August, 2024. Saiful Alam no longer returns to the country and has applied to renounce his citizenship. However, around 82 per cent of Islami Bank’s shares still remain under the direct and indirect control of S Alam.
The shares, though, have currently been seized by Bangladesh Bank. The bank is now being run by independent directors appointed by the central bank.
Meanwhile, after the amendment of the Bank Resolution Act (gazetted on 10 April), which created an opportunity for former owners to return to bank ownership, the story of the bank takeover has once again become a subject of discussion.
The Early Chapter of Islami Bank
During the rule of military ruler Hussain Muhammad Ershad, Bangladesh began issuing licences for private banks. In 1982 and 1983, eight private banks started operations, one of which was Islami Bank Bangladesh Limited (1983). In its annual reports, the bank describes itself as South Asia’s first Shariah-based bank.
During the 1970s and 1980s, a trend emerged across Muslim-majority countries to establish Islamic banks. Behind this initiative was the Organisation of Islamic Cooperation (OIC).
The connection between Jamaat-e-Islami and Islami Bank, as well as the issue of preferential recruitment of activists and leaders from Jamaat’s student wing, Islami Chhatra Shibir, had long remained a subject of discussion.
At an OIC ministerial conference held in Jeddah, Saudi Arabia, in 1973, the decision was taken to establish the Islamic Development Bank (IDB). The IDB formally began operations in 1975. Thereafter, initiatives were taken to establish Islamic banks in different countries. Islami Bank in Bangladesh was founded as part of that broader effort.
According to Islami Bank’s 2015 annual report, investors from various Middle Eastern countries then held 63.18 per cent of the bank’s shares. The remainder belonged to local investors. Among the local entrepreneurs were individuals closely associated with Bangladesh Jamaat-e-Islami. Two of them—Mir Quasem Ali and Abu Nasser Muhammad Abduz Zaher—were members of Jamaat’s central executive council.
During the Awami League government, Mir Quasem Ali was executed for crimes against humanity committed during Bangladesh’s Liberation War. In 2015, Zaher resigned from the post of chairman of Islami Bank and left the country.
Following the political changeover of 5 August 2024, he returned to Bangladesh.
The connection between Jamaat-e-Islami and Islami Bank, as well as the issue of preferential recruitment of activists and leaders from Jamaat’s student wing, Islami Chhatra Shibir, had long remained a subject of discussion.
After the S Alam Group took control of the bank, most foreign sponsor-shareholders and institutional investors gradually sold off their shares. These included the Islamic Development Bank, Dubai Islamic Bank, Islamic Investment and Corporation Doha, Islamic Banking System International Holding Luxembourg, Sheikh Ahmed Salah Jamjoom, Sheikh Fouad Abdulhamid AlKhateeb, the Al-Rajhi Group, Kuwait’s state-owned bank Kuwait Finance House, and the Saudi company Arabsas Travel and Tourist Agencies.
Local sponsor institutions such as Baitush Sharaf Foundation, Ibn Sina Trust, Bangladesh Islamic Center, and the Islamic Economics Research Bureau also gave up their shares.
In a letter sent in 2017 to the then finance minister Abul Maal Abdul Muhith (now deceased), IDB president Bandar M H Hajjar expressed concern, writing: “Despite holding 52 per cent of the shares, entrepreneurs from Saudi Arabia, Kuwait, and the IDB are becoming increasingly sidelined in the bank’s decision-making process.”
The Story Behind the Scenes
After the Awami League came to power in 2009, it initiated trials for crimes against humanity committed during Bangladesh’s 1971 Liberation War. On 5 February 2013, the International Crimes Tribunal sentenced Abdul Quader Mollah, assistant secretary general of Bangladesh Jamaat-e-Islami, to life imprisonment.
Protests erupted at Shahbagh over the fact that he had not received the death penalty, as well as suspicions of a secret understanding between the Awami League and Jamaat. During that movement, allegations surfaced that Islami Bank Bangladesh Limited had been financing Jamaat.
Even before that, the then government had accused Islami Bank of financing militancy. On 28 February 2011, following a meeting of the Home Ministry’s committee on the prevention and resistance of militancy, the then state minister for home affairs Shamsul Hoque Tuku told journalists: “Islami Bank is spending 8 per cent of its profits behind militancy. Bangladesh Bank is investigating the matter. To clarify the issue, Islami Bank will submit its expenditure accounts to the Home Ministry and the Finance Ministry.” (bdnews24.com, 28 February 2011)
On 5 January 2014, the Awami League returned to power through a one-sided election boycotted by the BNP and Jamaat. It was then that moves began to bring Islami Bank under control
Several officials of Islami Bank, however, say these allegations were made as part of efforts to take control of the bank.
On 5 January 2014, the Awami League returned to power through a one-sided election boycotted by the BNP and Jamaat. It was then that moves began to bring Islami Bank under control. Two directors who were on the bank’s board at the time told Prothom Alo that several directors and senior officials were frequently summoned to the DGFI headquarters.
In 2016, Bangladesh Bank appointed four independent directors to Islami Bank. They were the late Islamic Foundation director general Samim Mohammad Afzal, former Pubali Bank managing director Helal Ahmed Chowdhury, Chittagong University marketing professor Syed Ahsanul Alam, and former Islami Bank managing director M Azizul Haque (now deceased).
Two senior Bangladesh Bank officials from the time, speaking to Prothom Alo on condition of anonymity, said the government had pressured the central bank to establish its control over Islami Bank.
According to them, the then governor Atiur Rahman wanted to avoid financial damage to Islami Bank. Since it was the country’s largest bank, any serious disruption could destabilise the national economy. The governor therefore tried to manage government pressure by appointing independent directors.
At the time, the S Alam Group was Islami Bank’s largest client. In 2016, three companies of the S Alam Group had loans amounting to Tk 30 billion from the bank. The group conducted its transactions through the bank’s Khatunganj branch in Chattogram.
Under Bangladesh Bank regulations, a bank may lend up to 25 per cent of its capital to a single business group. The rule exists to limit financial risk.
The S Alam Group had already reached its borrowing limit at Islami Bank. It was no longer eligible for additional loans. Nevertheless, in 2016, S Alam applied for fresh loans from the bank. Islami Bank rejected the request.
A senior official of the bank, speaking anonymously to Prothom Alo, said that Bangladesh Bank governor Atiur Rahman then summoned Islami Bank managing director Abdul Mannan and told him that the government wanted more loans to be extended to S Alam. If the bank wanted to survive, it would have to provide the money.
At the time, Bangladesh Bank’s Offsite Supervision Department—which oversaw and approved large loans and no longer exists—relaxed the lending-limit conditions, thereby creating the opportunity for S Alam to receive additional financing. Islami Bank subsequently approved nearly Tk 20 billion in fresh loans to the group.
The general manager of the Offsite Supervision Department at the time was Rabiul Hasan. After the end of his tenure, he was appointed in 2020 as principal of Islami Bank’s training institute for a three-year term. By then, S Alam had already taken control of the bank.
After Rabiul, Nazrul Islam—deputy head of the Bangladesh Financial Intelligence Unit (BFIU) and an executive director of Bangladesh Bank—joined the same position. Following the fall of the Awami League government, his appointment was cancelled by the bank authorities.
Two Bangladesh Bank officials said that Saiful Alam’s personal secretary, Akiz Uddin, used to visit Bangladesh Bank regularly during that period. He reportedly spent long periods in the offices of governors Fazle Kabir and Abdur Rouf Talukder. Through these connections, loans and various irregular benefits were allegedly approved from banks under their control. Officials who provided special favours were later given jobs at banks controlled by S Alam after their retirement.
From United to S Alam
At the beginning of 2016, the United Group purchased 32.55 million shares of Islami Bank Bangladesh Limited. Later, however, it sold off those shares.
The shares had been purchased in the name of Grand Business Limited, an entity linked to the interests of the S Alam Group.
After that, the S Alam Group acquired additional shares of Islami Bank under various names. During different periods in May 2016, shares were purchased in the names of Excel Dyeing and Printing Limited, Armada Spinning Mills Limited, ABC Ventures Limited, Platinum Endeavours, Paradise International Limited, and Blue International.
Under stock market rules, ownership of 2 per cent of the shares of a listed company allows one to become a director.
At the time, there was widespread discussion that although S Alam was buying the shares of Islami Bank, control of the bank would eventually go to the Beximco Group.
The source further claimed that Salman F Rahman had said he would “manage” the higher levels of government. However, Saiful Alam reportedly replied that he had received no such “signal” and that the matter depended on the then DGFI officials.
A person close to S Alam, speaking to this reporter on condition of anonymity, said that Saiful Alam regularly prayed at a mosque beside his residence in Banani. In the early hours of 5 January 2017—the day Islami Bank was taken over—Salman F Rahman went to that mosque. He reportedly asked Saiful Alam to hand over control of Islami Bank to Beximco. Saiful Alam did not agree.
The source further claimed that Salman F Rahman had said he would “manage” the higher levels of government. However, Saiful Alam reportedly replied that he had received no such “signal” and that the matter depended on the then DGFI officials.
Attempts were made to verify this information through a second source, but that proved impossible. Salman F Rahman—vice chairman of the Beximco Group and former industry and investment adviser to then prime minister Sheikh Hasina—is now in prison. Saiful Alam is abroad.
Attempts were made to contact Saiful Alam through his WhatsApp number to seek comment on the overall matter, but he could not be reached. On 31 March, Prothom Alo also sent questions regarding the issue to the email address listed on the S Alam Group’s website. No response was received.
The DGFI-‘Produced’ Board Meeting
The board meeting of Islami Bank Bangladesh Limited mentioned at the beginning of this report—held on 5 January 2017—was originally supposed to take place at the bank’s headquarters in Motijheel. It was not a special meeting. Like other regular meetings, its agenda included customer loans and other banking matters.
At about 10:00 pm, managing director Abdul Mannan received a phone call from the DGFI. He was told that the following day’s board meeting would instead be held at the Radisson Blu Water Garden.
A senior official at the time, speaking on condition of anonymity, said that on the previous day, 4 January 2017, Islami Bank had held a meeting regarding promotions.
That meeting continued until around 10:30 at night. At about 10:00 pm, managing director Abdul Mannan received a phone call from the DGFI. He was told that the following day’s board meeting would instead be held at the Radisson Blu Water Garden.
Abdul Mannan informed the then company secretary of Islami Bank, Abu Reza Mohammad Yahya. Yahya immediately contacted the Radisson Hotel. The hotel informed him that no rooms suitable for a meeting were available. This was then conveyed to the DGFI. Their response was that there was no need to worry about the room—they would arrange it themselves.
Officials of Islami Bank had informed DGFI officers that a risk management meeting of the bank was scheduled for the morning of 5 January 2017, while the board meeting was set for around 2:30 pm. DGFI officials instructed that the risk management meeting should also be held at the Radisson.
The morning risk management meeting took place on the first floor of the hotel. Only members of the relevant committee attended. While the meeting was ongoing, DGFI repeatedly pressured participants to finish quickly. By the time it ended, it was lunchtime.
One senior official who had attended the risk management committee meeting told Prothom Alo on 27 April that while taking food from the buffet, he saw the bank’s chairman, Mustafa Anwar. He had been unable to reach either the chairman or the managing director by phone and had therefore feared that something unusual was about to happen. Seeing the chairman, he quietly asked, “Sir, what’s the situation?”
The chairman replied in just two words: “Everything’s over.”
Before the board meeting began in the afternoon, intelligence officials collected everyone’s mobile phones. There were five or six of them.
A former director of Islami Bank familiar with the events of that day, speaking anonymously, said that at the DGFI office, managing director Abdul Mannan was taken before the then DGFI director general Mohammad Akbar Hossain. He was forced to sign a resignation letter.
Meanwhile, that morning, the bank’s then chairman Mustafa Anwar, vice chairman Azizul Haque, and managing director Mohammad Abdul Mannan had left their homes heading toward the meeting venue. Instead, they were compelled to go to DGFI headquarters.
A former director of Islami Bank familiar with the events of that day, speaking anonymously, said that at the DGFI office, managing director Abdul Mannan was taken before the then DGFI director general Mohammad Akbar Hossain. He was forced to sign a resignation letter. The former director further said that Abdul Mannan was detained there until the evening, while the bank’s board meeting was proceeding elsewhere.
I was picked up and forcibly made to sign on a pad. The resignation statement had already been written there. That pad did not belong to Islami Bank. Since that incident, I have been mentally devastated
After being forced to resign from Islami Bank, Abdul Mannan left the country. He returned only after the fall of the Awami League government during the July mass uprising. Speaking to Prothom Alo, he said: “I was picked up and forcibly made to sign on a pad. The resignation statement had already been written there. That pad did not belong to Islami Bank. Since that incident, I have been mentally devastated.”
Following the July mass uprising, former DGFI director general Akbar Hossain was made an accused in a crimes against humanity case filed at the International Crimes Tribunal over incidents of enforced disappearance. He is currently absconding.
At the DGFI-“produced” board meeting, Arastoo Khan was made the new chairman of Islami Bank as the representative of Armada Spinning Mills. Armada Spinning is a business entity linked to the interests of the S Alam Group. Previously, Arastoo Khan had served as chairman of Commerce Bank, which was owned by the S Alam Group.
Two sources present at the meeting said that after Arastoo Khan was elected chairman, Saiful Alam handed him a piece of paper and instructed him to announce the name of Abdul Hamid Miah as managing director. The name was then formally announced.
At the time, Abdul Hamid Miah was serving as managing director of Union Bank, another bank under S Alam’s control. He was made managing director of Islami Bank.
Sources from the meeting further said that Arastoo Khan also announced the name of Habibullah as company secretary of Islami Bank after looking at another paper handed to him by Saiful Alam.
The meeting continued until evening. That very night, documents appointing the new chairman, vice chairman, and managing director were prepared. Around midnight, those papers were taken to the Governor House—the residence of the then Bangladesh Bank governor Fazle Kabir.
Approval from Bangladesh Bank is required for appointments to the positions of chairman and managing director of a bank.
Two Islami Bank sources said Fazle Kabir came downstairs from the upper floor wearing a lungi and received the documents. On the next working day, Sunday morning, the new appointments at Islami Bank were approved.
Despite repeated allegations of scandals and financial mismanagement in the banking sector, former finance secretary Fazle Kabir was retained as governor for two terms. In fact, the law was amended to relax the age limit so that he could continue in office. There has long been discussion that he was able to remain in the position for two terms because of the influence of the S Alam Group.
Several attempts were made to contact Fazle Kabir by mobile phone to seek his comments on the matter, but he did not respond. He has since been made an accused in murder cases linked to the July mass uprising.
However, on 17 August 2024, Fazle Kabir told this reporter over the phone: “I remember that a change in ownership took place during my tenure at Islami Bank. If any irregularities occurred, the chairman, vice chairman, and managing director of that bank would be able to say so.”
Regarding allegations of close ties with S Alam Group officials, Fazle Kabir said at the time: “Since Mr S Alam stayed in Singapore, many of his officials used to come. I never gave anyone any extra advantages.”
Nevertheless, it was during Fazle Kabir’s tenure as governor that the forcible transfer of ownership at Islami Bank and large-scale irregularities took place. He approved those changes.
[In the second part of this two-part report, read about DGFI at the Prothom Alo printing press, the departure of Arastoo Khan, the appointment of loyalists after the takeover of Islami Bank, and the inside story of how SIBL was taken over using the same method.]