S Alam threatens legal action against govt over 'asset freezing, investment destruction': FT

Infograph: TBS

Mohammed Saiful Alam, founder and chairman of Chattogram-based conglomerate S Alam Group, who faces allegations of plundering billions of dollars from Bangladesh's banking sector, has initiated legal efforts to recover losses he claims were caused by the interim government freezing his assets and damaging his investments, reports UK-based the Financial Times (FT).

The report highlighted that Saiful Alam, acting as a Singaporean citizen, could jeopardise the interim government's efforts to recover billions of dollars siphoned out of the country during the Awami League regime, which was ousted in a mass uprising on 5 August.

In a notice of dispute letter sent to Chief Adviser of Bangladesh's interim government Muhammad Yunus and several of his closest advisers on 18 December, Alam's lawyers state that unless the two sides can resolve the dispute within six months, they will begin international arbitration, FT report reads.

According to the report, the lawyers are making the case under a 2004 bilateral investment treaty between Bangladesh and Singapore, where the S Alam family are currently based.

Following the fall of the Sheikh Hasina government, numerous allegations of financial irregularities surfaced, including claims that Saiful had secured thousands of crores of taka in bank loans using fake companies from banks under S Alam's ownership.

In response, the interim government has launched investigations into the allegations and taken legal actions against Saiful Alam and his family members, including freezing their bank accounts and imposing travel bans.

In a November letter, S Alam's lawyers warned Bangladesh Bank Governor Ahsan H Mansur that they could seek to begin international arbitration procedures against Bangladesh.

The letter sent on 18 December states that the family obtained permanent residence in Singapore in 2011 and citizenship between 2021 and 2023. It adds that they all renounced their Bangladeshi nationality in 2020.

The letter, sent by lawyers Quinn Emanuel Urquhart & Sullivan, alleges that the Alam family's bank accounts have been frozen and they have been subjected to travel bans and lost control of their companies, while also being investigated by state bodies over potential money laundering without official notice, the FT report mentions.

It states that banks owned by S Alam have been restricted from lending and had their management teams changed, while deals they had in place have been cancelled by the interim government "arbitrarily and without due process".

"The value of the investors' investments has been destroyed, in whole or in part, through the acts and omissions of Bangladesh, its agencies and instrumentalities," the Quinn Emanuel letter states.

"Those acts and omissions, which are ongoing, have violated and continue to violate the investors' rights under [investment treaties] and the laws of Bangladesh, and give rise to the present dispute."

The FT report says that the interim government did not respond to its request for a comment on the letter.

In October, Bangladesh Bank Governor Ahsan H Mansur told the FT that Saiful Alam, his associates and other groups had siphoned at least $10 billion out of the banking system after taking over leading banks with the help of members of a powerful military intelligence agency during the AL regime.

Mansur, a former IMF official, alleged that they used methods such as loans to the banks' new shareholders and inflated import invoices as part of what he called the "biggest, highest robbing of banks by any international standards".

A spokesperson for Bangladesh's central bank said: "The issues are under investigation and the central bank is refrained from any comment for the betterment of the investigation outcomes."

The FT report also mentions that Tulip Siddiq, a UK Treasury minister who is Sheikh Hasina's niece, was named this week in a Bangladesh High Court corruption claim that accused her family of embezzling $5 billion.

Siddiq has declined to comment publicly, but a spokesperson for the UK government said she had denied "any involvement in the allegations".