Awami Board Still in Place
Four Independent Directors Resign from Al-Arafah Islami Bank
Four controversial independent directors have resigned from Al-Arafah Islami Bank in line with instructions from Bangladesh Bank. After the fall of the Awami League government following the mass uprising in August 2024, the central bank dissolved the previous board and appointed a five-member board, including these four directors. None of them were shareholders of the bank. Former governor Dr Ahsan H Mansur formed the board with some of his own people.
Far from restoring good governance, they too ran the bank in the same manner as during the tenure of autocrat Hasina, as they had no accountability to the bank. No action was taken against those involved in irregularities and looting at the bank even after one and a half years. Rather, they themselves became involved in corruption and irregularities. Although the bank was established with the goal of contributing to the establishment of a just society, this particular board also became involved in irregularities. By appointing their own people, they turned the bank into a breeding ground for irregularities.
A former director of the bank, speaking on condition of anonymity, said that although the board was formed after the mass uprising to protect the bank from S Alam and KDS Group, described as the country’s top corrupt individuals and bank looters, questions remained over the qualifications, skills and capabilities of the board members. They even resorted to various irregularities to protect corrupt individuals. Moreover, on July 15 this year, the old owners were brought back while retaining these directors.
The four independent directors who resigned are—former Executive Director of Bangladesh Bank Md Shaheen Ul Islam, former Deputy Managing Director (DMD) of NRB Bank Md Abdul Wadud, Chartered Accountant Mohammad Ashraful Hasan (FCA), and Dhaka University Professor M Abu Yusuf. Of the previously appointed independent directors, only Khwaja Shahriar, former Managing Director (MD) of LankaBangla Finance, remains in office. On October 3, 2024, the central bank formed the board with these five independent directors, with Khwaja Shahriar as chairman.
A Bangladesh Bank official said the central bank had appointed these independent directors. Since control of the bank has been handed back to the old owners, the previous independent directors were asked to resign. He said that after the old owners returned to the board on July 15, the independent directors faced a degree of discomfort over various issues.
On July 15 this year, Bangladesh Bank appointed 14 new directors. Seven of them were associated with Chattogram-based KDS Group. Allegations have been raised against the 14-member new board, comprising 12 sponsor directors and two independent directors, that controversial individuals and a particular family have once again been brought back to the board. At the same time, the appointment of seven members of a single family to the new board violated the Bank Company Act. Under the Bank Company Act, no more than three members of the same family can serve on a board.
However, a day after the formation of the board, on July 16, two directors were removed for violating the Bank Company Act. Even after that, five members of the same family remain directors. They are Khaliur Rahman; Khaliur Rahman’s son and Managing Director of KDS Group, Selim Rahman; Khaliur Rahman’s younger brother and Selim Rahman’s uncle, Ahmedul Haque; Badiur Rahman, the in-law of Khaliur Rahman’s younger brother Ahmedul Haque and a close associate of the KDS family, who served on the bank’s board in various capacities, including as chairman and member of the Executive Committee for multiple terms from 2008 to 2023 and allegedly assisted S Alam and KDS Group in various irregularities; and Mahbub Ahmed, who joined the board as the nominee director of KDS Garments Industries Limited.
Meanwhile, before the fall of the autocratic Awami League government, the chairman of Al-Arafah Bank was Abdus Samad Labu, brother of S Alam Group Chairman Saiful Alam Masud. Many of those newly included in the board had also served on the previous board. Among them, Anwar Hossain, described as being very close to autocrat Sheikh Hasina, allegedly took control of the bank on behalf of S Alam and KDS Group in 2009.
Badiur Rahman has been made chairman of the board formed on July 15. Liakat Ali Chowdhury has been appointed vice chairman. The directors include KDS Group Chairman Khaliur Rahman, his son Selim Rahman, KDS Garments’ representative director Mahbub Ahmed, Mohammad Abdus Salam, Nazmul Ahsan Khaled, Md Enayet Ullah, who contested the most recent parliamentary election from Dhaka-7 on behalf of Jamaat-e-Islami, Ahmedul Haque, Mohammad Imadur Rahman, Md Rafiqul Islam, Anwar Hossain and Mesbah Uddin Ahmed.
