Tycoons tied to Hasina govt syphoned off $17b, S Alam alone grabbed $10b: BB governor

Bangladesh Bank Governor Ahsan H Mansur has said tycoons connected to the ousted government of Sheikh Hasina have syphoned off nearly $17 billion from the country's banking sector during her more than 15-year rule.

In an interview with British newspaper the Financial Times, Mansur said the Directorate General of Forces Intelligence (DGFI), Bangladesh's powerful military intelligence agency, played a role in orchestrating forced takeovers of some banks.

He said an estimated Tk2 lakh crore, equivalent to $16.7 billion, had been spirited out of Bangladesh following these bank takeovers, using methods such as loans issued to their new shareholders and inflated import invoices. 

"This is the biggest, highest robbing of banks by any international standards," Mansur said. 

"It did not 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," he said. 

The governor said Mohammed Saiful Alam, founder and chairman of Chattogram-based industrial conglomerate S Alam Group, and his associates had "syphoned off" at least $10 billion "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.

'No truth' says S Alam

In a statement issued by law firm Quinn Emanuel Urquhart & Sullivan on behalf of Saiful Alam, the S Alam Group said there was "no truth" to Mansur's allegations, the Financial Times reports.

"The coordinated campaign of the interim government against the S Alam Group and several other leading businesses in Bangladesh has failed to respect even basic principles of due process," it said.

"It has already undermined investor confidence and contributed to the deterioration of law and order," the statement said.

"Given the Group's record and contributions, we find the accusations by the governor…surprising and unjustified," the group said in its statement.

ISPR did not respond to query

Financial Times said the Inter-Services Public Relations Directorate, which handles media inquiries for Bangladesh's armed forces, did not respond to its request for comment, and the DGFI could not be reached for comment either.

"At gunpoint"

The Bangladesh Bank chief told the Financial Times last month that he had sought the UK's help to probe the overseas wealth of Hasina's allies and that board members of leading banks had been targeted under her rule.

The board members were "hijacked from their houses" by intelligence officials, taken to other locations such as hotels, and told "at gunpoint" to sell all their shares in the banks to "Mr S Alam" and to resign their directorships. 

"At one bank after another, they did it," Mansur told Financial Times.

One former bank CEO told the Financial Times that he had been forced to resign from his position as part of a forcible takeover. 

Mohammad Abdul Mannan, a former CEO of Islami Bank Bangladesh, one of the country's largest lenders, said he came under pressure from "people associated with the then-government" since 2013.

This included pressure to recruit bank board members suggested by the Prime Minister's Office and a search by "people related to government agencies" of a hotel room used by one of the bank's foreign directors.

Mannan said that in January 2017 he was diverted on his way to a board meeting and taken to see a senior defence official, then confined for a full working day to force him to resign.

"They prepared bank letters on fake stationery," said Mannan, who was appointed chair of First Security Islami Bank by the central bank in September this year. "I had to sign a resignation letter."

At least Tk2 lakh crore taken abroad

At a programme last month, central bank's Governor Ahsan Mansur said Bangladesh's interim government is investigating money laundering by influential figures associated with the Sheikh Hasina administration. He revealed that at least Tk2 lakh crore was diverted abroad – particularly to the UK, the US, Singapore, and the UAE – from the country's banking system.

Rise of S Alam

S Alam's journey in banking began in the early 2000s when he took full control of the First Security Islami Bank and acquired stakes in Al-Arafah Islami Bank.

His influence expanded further in 2013 when he secured licences for NRB Global Bank and Union Bank as conventional banks. His grip on the industry was solidified in 2017 when he took over Islami Bank Bangladesh, the largest bank in terms of deposits and loans, and Social Islami Bank Limited (SIBL). Later, he took control of Bangladesh Commerce Bank, a joint venture between the public and private sectors.

Using his influence, S Alam later transformed Union and Global banks into Shariah-compliant institutions, despite the Bangladesh Bank's stringent regulations on the establishment of new Shariah-based banks.

Overall, S Alam took control of seven banks, six of which are Shariah-compliant. He then emerged as a kingmaker, particularly in the field of Islamic banking.

For example, as of the end of March this year, the total deposits in the Islamic banking system amounted to Tk439,465 crore. Of this, over 70% were held by six banks either fully or partially controlled by S Alam.

Similarly, these six banks accounted for over 72% of all investments (lending) made by Islamic banks in the country.

S Alam also controlled Aviva Finance, a non-bank financial institution, and one insurance company.  

To shed light on the scale of S Alam Group's assets, The Business Standard on 28 August published a report conducting an in-depth analysis of companies owned by the group.

According to the group's website, the total value of assets across nearly two dozen companies is estimated at around Tk1.5 lakh crore.

Among the group's holdings, the real estate and properties sector commands the highest value with assets worth Tk25,454 crore, comprising 28 land and building units primarily located in Dhaka and Chattogram. Following closely are the coal-fired power plants, valued at Tk21,092 crore, and the import and trading sector, with assets exceeding Tk20,000 crore.