MDs of 6 banks, including 4 once controlled by S Alam Group, sent on leave

Managing directors (MDs) of six banks, including four that were under the control of S Alam Group during the Awami League regime, have been sent on leave ahead of ADB-funded forensic audits of the institutions.  

Syed Waseque Md Ali, MD of First Security Islami Bank, was the first to be sent on leave for three months on Saturday.

The MDs of Exim Bank, Global Islami Bank, Social Islami Bank, ICB Islamic Bank, and Union Bank were also sent on leave today. But their duration of leave could not be known yet.  

Of the banks, First Security, Global Islami, Social Islami and Union were previously controlled by the S Alam Group.

According to central bank officials, a foreign audit firm is initiating forensic audits of the six banks with funding from the Asian Development Bank (ADB). 

To ensure the audits are conducted transparently, it prefers that none of the current managing directors remain in office during the process, they said. For this reason, the central bank has verbally instructed them to place them on mandatory leave, the officials said.

Bangladesh Bank Spokesperson Husne Ara Shikha told TBS, "The decision to place the managing directors of six banks on leave was made by the respective bank boards. These banks will undergo an asset quality review alongside the planned audits. 

"The managing directors have been sent on leave to prevent any undue interference in the audit process."

If the audit finds that the managing directors are not involved in any wrongdoing, they will be allowed to return to their positions at the banks, she said. 

"However, if any irregularities are identified, appropriate actions will be taken. This decision has been made in accordance with international standards," said the central bank spokesperson.

Bangladesh Association of Banks Vice Chairman and First Security Islami Bank Chairman Mohammad Abdul Mannan told reporters that such a decision has been made to ensure the audit is conducted transparently. 

"If no wrongdoing is proven against anyone, they will be allowed to return to their positions," he said.

Officials concerned said the Bangladesh Bank held an emergency meeting last Thursday with the board members of six banks. During the meeting, it was decided to conduct further investigations into these banks, and instructions were given to remove senior officials, including managing directors closely associated with S Alam Group, to facilitate the next steps.

In line with the central bank's directive, First Security Bank held an emergency board meeting on Saturday and made the decision. The other five banks took similar steps today.

Mohammed Saiful Alam Masud, the head of S Alam Group, was the chairman of First Security Islami Bank. Following the change of government, on 1 September, the Bangladesh Bank dissolved the bank's board of directors and reconstituted it.

The position of chairman was assigned to Mohammad Abdul Mannan, former managing director of Islami Bank Bangladesh.

In 2017, during S Alam Group's takeover of Islami Bank, Mannan was allegedly forcibly removed and compelled to resign.