IBBL: Board members, bank officials aided in lootings

The representative directors of various companies owned by S Alam Group had held chairmanship and board of directors’ membership at the Islami Bank Bangladesh Limited for the eight years prior to the fall of the Awami League government. They mainly sanctioned the half of the bank’s loans amounting over Tk 730 billion, allowing the S Alam Group to swindle the money. Many officials including managing directors of the bank aided the conglomerate in it.

Independent directors also got involved in irregularities. There was a central bank observer but the official’s roles raised questions. The Anti-Corruption Commission already filed cases against former IBBL chairman and Saiful Alam’s son Ahsanul Alam, former directors, the incumbent managing director and several officials on allegations of embezzling Tk 10.92 billion. Yet, many of those who aided in these wrongdoings are still out of reach.

Irregularities and loan fraudulence at the IBBL came to the limelight after the fall of the Awami League government on 5 August. Conglomerate S Alam Group, which was close to former prime minister Sheikh Hasina, took away half of the bank’s loans in their names or anonymously after the bank ownership changed in 2017, leading to a liquidity crisis. The central bank appointed independent directors after the political changeover and they are frantically trying to mend the bank’s financial health, as well as to bring old foreign partners.

Who were in charge?

The bank’s board appointed new chairman, vice chairman and MD at a meeting held under special security arrangements in the capital’s Radisson Blue Hotel on 5 January 2017.

Members of a certain intelligence agency picked up then IBBL chairman Mustafa Anowar, vice chairman Azizul Haque and MD Abdul Mannan from their homes and they resigned moments before the meeting was held. Arastu Khan, who was previously the chairman of S Alam Group-owned Commerce Bank, became the new IBBL chairman and Abdul Hamid Mia, then MD of Union Bank, became the new IBBL MD.

On the same day, then-Bangladesh Bank governor Falze Kabir approved these appointments late at night. Then the bank looting started. Arstu Khan resigned in April 2028 as irregularities started to unfold. Dhaka University professor Nazmul Hasan as the representative of S Alam Group’s Armada Spinning Mill became the new chairman, and most of the big irregularities took place during his tenure.

Besides, all nominated and independent directors of the bank were close to S Alam Group from 2017 to 5 August 2024. Those who were on the bank's board of directors, executive committee, and audit committee were S Alam's son Ahsanul Alam, Dr Tanvir Ahmed, retired army officer Abdul Matin, Chittagong University teachers Selim Uddin, Mohammad Saleh Zahur, bank officials Joynal Abedin, Abu Asad, Khurshid ul Alam and Zillur Rahman, chartered accountant Mohammad Solaiman and Mohammad Nasir Uddin, Fashiul Alam, Borhan Uddin Ahmed, Mohammad Sirajul Karim, Kazi Shahidul Alam, Mohammad Kamrul Hasan and Kamal Hossain Gazi.

Mahbub-Ul-Alam, who was a deputy managing director, became the new MD after Abdul Hamid Mia ended his term in February 2028. Then S Alam Group made Abdul Hamid Mia an advisor to First Security Islami Bank, chairman of Social Islami Bank and director of Global Islami Bank. The conglomerate owned these banks. As Mahbub-Ul-Alam ended his office, incumbent MD Mohammad Munirul Mowla took charge of the MD in January 2021. Directors and officials, who raised objections to the swindling of money by S Alam Group, were forced to leave the bank.

Who played what roles?

It has been learned after speaking to several directors and officials that the bank board approved loan proposals for any known or anonymous company without raising a question. Several officials from Chattogram regions were promoted and posted to important branches and divisions to prepare these loan proposals. S Alam’s personal secretary and IBBL DMD Akij Uddin appointed manpower en mass while DMD Mihta Uddin handed the money without facing any bar from the bank’s board.

According to several former and incumbent officials, directors received an honorarium of Tk 50,000 per meeting instead of the fixed amount of Tk 8,000 per month. Several people including former MD Mahbub-ul Alam, DMD Miftah Uddin and Mohammad Sabbir allegedly received 5,000sqft flats in The Address building in Gulshan. The officials who were the beneficiaries did not join the office after the change to the government. Former chairman Nazmul Hasan also allegedly received a huge monetary benefit. None of them could be reached over the mobile phone for comment.

Recently, the ACC filed a case against 58 people including the former IBBL chairman on the allegation of embezzling Tk 10.92 billion through fraudulence. The other accused were the bank's former director Mohammad Selim Uddin, former vice chairman Tanvir Ahmed, former director Md Fasiul Alam, Kazi Shahidul Alam, Md Sirajul Karim, Jamal Mostafa Chowdhury, Md Joynal Abedin, Khurshid Ul Alam, former independent directors Mohammad Saleh Zahur and Mohammad Solaiman, director Md Kamrul Hasan and former nominated director Syed Abu Asad. Besides, the bank's MD Muhammad Monirul Maula, additional MD Md Altaf Hossain, former additional MDs Muhammad Kaiser Ali and KQM Habibullah, former DMD Md Mostafizur Rahman Siddiquie, Miftah Uddin, Mohammad Ali, Mohammad Sabbir, Kazi Md Rezaul Karim are among other accused.

Prothom Alo tried to contact 10 IBBL officials including former chairmen, directors and other officials but none of them received mobile phone calls.

However, former director Joynal Abedin told Prothom Alo, “I was a DMD at a government bank and I was not made the MD. I was called to Ganabhaban in 2017 and I was told to join the IBBL as a director. Later, I was also given responsibility for the executive committee. As I protested a loan proposal during the early days I was removed from the executive committee. So, I was a director for eight years.”

“Loan proposals were approved at all levels before they reached the bank’s board of directors. Branches, divisions, various committees and MD approved these and informed that board of having adequate collaterals, then we approved these loans,” he added.

Wounds of the banks

According to central bank and Bangladesh Financial Intelligence Unit reports, S Alam Group took loans worth Tk 731.13 billion from the IBBL, which is about 50 per cent of the total loan outstanding. Documents showed S Alam Group borrowed Tk 561.18 directly, Tk 75.24 billion indirectly and Tk 94.71 billion in their interests.

Incumbent IBBL chairman Md Obayed Ullah Al Masud told the journalists S Alam Group took more than half of the lending the bank disbursed. Now, full accounts of these loans are being unveiled and the collaterals against S Alam’s borrowings are being reevaluated, he added.

Meanwhile, in an interview with the Financial Times, Bangladesh Bank governor Ahsan H Mansur, the Directorate General of Forces Intelligence had helped force takeovers of leading banks. “This is the biggest, highest robbing of banks by any international standards,” he said. “It didn’t happen on that scale anywhere, and it was state-sponsored and it couldn’t have happened without intelligence people putting guns [to former bank CEOs’] heads.”

The governor said Mohammed Saiful Alam, founder and chair of industrial conglomerate S Alam, and his associates had “siphoned off” at least $10bn “as a minimum” from the banking system after taking control of banks with the help of the DGFI. “Every day they were granting loans to themselves,” he said.

This report appeared in the print and online editions of Prothom Alo and has been rewritten in English by Hasanul Banna