The Bangladesh Securities and Exchange Commission (BSEC) on Monday formed an inquiry committee to investigate the market activities and irregularities involving Salman F Rahman of Beximco Group and Chattogram-based conglomerate S Alam Group and its owner Saiful Alam.
As per an order from the capital market regulatory body, the committee will look into whether Salman and S Alam Group Chairman Saiful committed any irregularities related to the capital market.
At the same time, the committee will look into the activities of other members of both influential business tycoons’ families and the companies under their control during the previous Awami League regime.
The four-member committee is led by BSEC Director Mohammad Abul Hasan and the other members are BSEC Additional Director Md Nazrul Islam and Assistant Directors Amit Kumar Shaha and Towhidul Islam Saddam.
The committee will submit a report to BSEC within 60 working days.
The BSEC order issued on Monday also referred to a news report that mentioned Salman as a loan defaulter in the 1980s. His name was also linked to the infamous 1996 share market scam.
Earlier, on August 29, the Bangladesh Financial Intelligence Unit (BFIU) instructed banks to freeze accounts belonging to Salman, along with those of his wife and son.
Banks were also instructed to suspend transactions across these personal accounts for an initial period of 30 days, according to a letter from BFIU.
Salman, a former MP and former prime minister Sheikh Hasina’s private industry and investment adviser, was arrested on August 13.
One of the banks with substantial exposure to Salman's Beximco Group is Janata Bank. The bank provided Tk 4,974 crore in total to Beximco, with Tk 1,713.68 crore as restructured loans.
According to the Janata Bank annual report of 2022, the three sister concerns of Beximco Group — Beximco Ltd, Beximco Fashion and Beximco Pharma – have received Tk 1,421.27 crore, Tk 900.21 crore and Tk 694.4 crore, respectively, as loans from the bank.
Salman's notorious legacy also appears to have extended to his son, Ahmed Shayan Fazlur Rahman, who recently lost his directorship at IFIC Bank due to loan irregularities.
Besides, on September 01, the BSEC formed a probe committee to investigate past irregularities, manipulation, and corruption in the capital market, including issues related to Beximco Sukuk and Sreepur Township bonds linked to Salman.
This committee is headed by Zia Uddin Ahmed, chairman of Terra Resources International and VIPB Asset Management. It will investigate 12 issues in the first phase and submit a report to the commission within 60 days.
Meanwhile, Saiful Alam weaponised his political influence to seize control of Islami Bank Bangladesh PLC and several other Shariah-based banks.
In recent weeks, Saiful lost the control he had forcibly gained over six Shariah-based banks after the boards were reconstituted by the central bank.
Islami Bank’s newly appointed Chairman Md Obayed Ullah Al Masud last Thursday said that S Alam Group alone has taken more than half of the total loans disbursed by the bank, posing a significant recovery challenge.
After meeting with Bangladesh Bank Governor Ahsan H Mansur, Masud said that Islami Bank’s total loan disbursement stands at around Tk 1.75 lakh crore, with S Alam Group taking more than half, or over Tk 87,500 crore.
However, Masud noted that this is not the final account, and a complete assessment will take another week.
"S Alam overvalued its assets to secure these loans, and we are now in the process of reassessing them. Additionally, collateral held against these loans is insufficient to cover the outstanding amounts.
“We have written to the law ministry to identify assets outside of the current collaterals," he said.
When the new board took charge, the bank was facing a liquidity shortage of Tk 2,300 crore, but this deficit is improving day by day, he further said.
