What happened at UCB on 9 December 2021?

For most Bangladeshi corporate professionals, Thursday is a day to push through the week's final work hours with the promise of a weekend spent with family and friends. But for Adnan Huda, the chief operating officer of UCB Stock Brokerage, 9 December 2021, a Thursday, turned into an episode of high-stakes corporate drama that left a trail of losses and allegations.

The day began routinely for Huda until a WhatsApp call at 12:30pm from Adnan Imam, chairman of Genex Infosys Ltd, changed everything. 
 

Imam requested Huda to facilitate the purchase of nearly 61 lakh pre-IPO shares of Genex at a rate of Tk172.50 per share on behalf of United Commercial Bank PLC (UCB). The transaction, Imam said, involved accounts belonging to his sister and brother-in-law, and supporting documents had already been sent to the bank.

Huda was stunned. The request came without prior notice or formal approval. Upholding corporate protocol, he informed Imam that he could not proceed without authorisation from the bank's competent authorities.

But what happened next was anything but ordinary. Unknown to Huda, Imam was not alone during the call – Anisuzzaman Chowdhury (Rony), then chairman of UCB's executive committee, was with him.

Seconds later, Rony took over the conversation, instructing Huda to execute the purchase. Rony assured him the deal had been approved by UCB's board of directors, according to the bank's internal investigation that revealed the controversial transaction and its trail of approvals.

Moments later, a messenger arrived at UCB Stock Brokerage's Gulshan office with documents: minutes of UCB's 465th board meeting and extracts from the 464th meeting. The paperwork confirmed board approval for the transaction at the price proposed by the seller.

Meanwhile, Sheikh Mohammad Rashedul Islam, managing director and CEO of UCB Asset Management, also remained in the dark. Tasked with advising UCB's capital market portfolio, Islam only became aware of the massive transaction late that afternoon when he noticed an unusually large trade in Genex Infosys shares in the bank's proprietary portfolio.

In the initial proposal presented to UCB's board of directors on 24 October 2021, the sellers of Genex Infosys shares offered a 10% discount on the prevailing market rate. However, by 30 November 2021, when the final proposal was placed before the board for approval, the terms had changed – the shares were to be purchased at the prevailing market price, with no discount. 

The sellers, confident in their position, saw no reason to offer a concession when they had the backing of UCB's most influential family, which had dominated the bank's board for nearly 15 years.

The numbers that emerged from this deal now cast a long shadow over UCB. The bank purchased 6,083,000 shares at a total cost of Tk105.15 crore. As of 26 September 2024, those shares were worth less than Tk27 crore, leaving UCB with a staggering loss of over Tk78 crore – a blow borne by depositors' money.

The Bangladesh Bank, in an inspection report based on 31 December 2022, found that UCB violated regulations when purchasing Genex Infosys shares by failing to obtain prior approval from the central bank.

"The matter was uncommon and unusual," the report stated, noting that UCB conducted no critical analysis before the purchase of shares in the listed company.

On 20 November this year, Sharif Zahir, UCB's current chairman, wrote to the Anti-Corruption Commission (ACC) alleging that Imam, with connections to influential figures in the bank, had secured Tk2,000 crore in loans from UCB, breaching rules with the help of allies close to former land minister Saifuzzaman Chowdhury Javed.

The letter said Adnan Imam used several of his entities such as "Genex Infosys, Genex Infrastructure, A&P Venture, AWR Developments, and AWR Real Estate" to secure the loans. These loans were granted in violation of the bank's credit norms. 

Zahir alleged that the deal was designed for personal gain, pointing to possible illicit connections between the sellers and the former board members.

He urged the ACC to launch a thorough investigation into these irregularities and take legal action against all individuals involved, including former minister Saifuzzaman, his brother Anisuzzaman Chowdhury and the former board members, sellers Amer and Zahara Rasul, Adnan, and others.

He also urged accountability to protect the interests of the bank's shareholders and depositors.

What Adnan Imam told TBS

Adnan Imam, chairman of Genex Infosys Limited, has accused the current board of UCB of targeting him unfairly in a financial dispute. Talking to TBS, Imam claimed, "The board sees me as an easy target – an expatriate Bangladeshi who would not retaliate."

He said internal conflicts within UCB's previous and present leadership might drive the allegations. He pointed to Sharif Zahir, the current chairman, speculating that Zahir may have unresolved issues with the bank's previous board of directors. "They are trying to link me with the previous board and make me a scapegoat," Imam alleged. 

The businessman criticised UCB's handling of broader issues, claiming the bank has ignored significant challenges, including large loans to major clients, and instead focused on implicating him.

Imam also questioned UCB's decision to hold onto Genex Infosys shares for an extended period instead of selling them when the prices were favourable.

"I live abroad but invested in Bangladesh and created jobs for 4,000 people," he said, expressing his frustration. "Now I am being harassed and forced into default. It is demotivating, and my business is at stake."

When asked about his ties to Anisuzzaman Chowdhury Rony, a key figure in UCB's previous board, Imam described him as a long-time friend.