ICB Financial Group warns of legal action, writes to BB governor
Switzerland-based ICB Financial Group purchased 53 per cent of shares in ICB Islamic Bank (formerly Oriental Bank) through an open auction called by Bangladesh Bank, but the group no longer holds control over the bank.
The foreign group invested Tk 3.5 billion in the bank in 2008 in compliance with the auction terms.
Meanwhile, former investors of Oriental Bank filed lawsuits, thus, withholding the sale and purchase of the bank’s shares.
As a result, ICB Financial Group's investment in the bank got stuck. As the financial condition of ICB Islamic Bank continued to deteriorate, Bangladesh Bank dissolved the bank’s board of directors in April this year.
Currently, a central bank official is serving as chairman and managing director of the bank.
Amid this situation, ICB Financial Group sought compensation, losing control over ICB Islamic Bank. The Switzerland-based group demanded the return of its investment, if they do not get full control of the bank.
Otherwise, they will go to the international court for settle the dispute.
Josephine Sivaretnam, chairman of ICB Financial Group Holdings AG (ICBFGH), sent a letter to Bangladesh Bank governor Ahsan H Mansur, informing the latter in detail.
Copies of the letter were sent to Finance Advisor Salehuddin Ahmed and Bangladesh Investment Department Authority chairman Chowdhury Ashik Mahmud Bin Harun (Ashik Chowdhury).
The letter said, “We expect your response to the above-stated situation urgently, otherwise we have no other alternative but to go to the International Court to seek justice.”
The letter said, “We draw your kind attention to the Share Sale and Purchase Agreement dated 28 February 2008 signed by ICB Financial Group Holdings AG (ICBFGH), The Purchaser, the Oriental Bank Ltd. (OBL) and Bangladesh Bank (BB) and hereinafter referred to as "the Agreement’.
Pursuant to clause 2.2 of the Scope of the Agreement, it was provided, inter alia, that BB shall instruct OBL to, and OBL shall issue, and the Purchaser shall subscribe, the Shares, free from any Encumbrance and with all rights attached or accruing to them on and after the date of this Agreement.
Additionally, clause 1.1.2 of Schedule 2 of Representation and Warranties provided that the shares are free from any Encumbrance and there are no arrangements in force or claimed entitling or allegedly entitling any person to any Encumbrance. With this assurance ICBFGH invested a sum of about Tk 3.51 billion (Tk 350.67 crores) in the then OBL, now ICB Islamic Bank Ltd, in 2008.
“But this assurance was belied by the fact that the erstwhile shareholders of OBL filed several cases against BB and challenged the legality of the forfeiture of their shares by BB. These cases are still pending at the Supreme Court and we are of the view that ICBFGH's interests are not safeguarded and BB is not taking adequate steps to resolve these legal hurdles. We are also of the view that BB is in breach of its obligations under the Agreement, and therefore the Agreement is null and void,” it reads.
The letter further stated, “The interests of ICBFGH shareholders have been consistently compromised and at no point in time, has BB been able to give comfort to the present shareholders that their investment in the Bank is safe and secured, and that they are truly the majority shareholders of the Bank and that their shares are unencumbered. Furthermore, BB has not yet given its approval for the appointment of the new Managing Director/CEO of the Bank as proposed by the Board and application submitted on 2 February 2025. Rather, BB has taken control of the Bank by dissolving the Board of Directors of the Bank and engaging one of its staff to run the affairs and business of the Bank.”
“With this insecure and tentative feeling no investor(s) or shareholder(s) would venture to inject any additional capital into the Bank. In fact, not just the present shareholders, any strategic investor(s) would hesitate to make fresh investment(s) in an organisation where uncertainty of ownership continues unabatedly. The ruling of the High Court not to sell/transfer the shares acts as an unlawful restraint to freely deal with their shares and no Strategic Partner would want to inject capital without a proportionate stake/share in the Bank, which the High Court ruling obviates,” the letter said.
Regarding this, Bangladesh Bank spokesperson Arif Hossain Khan said ICB Financial Group invested in this bank enthusiastically, and it would be best if a legal resolution can be reached now with the assistance of the state.