High Court Orders Freeze on 81.92% of Islami Bank Shares Held by 24 S Alam-Linked Entities

The High Court has ordered an immediate three-month freeze on 81.92 percent of Islami Bank’s shares allegedly held and exclusively controlled by 24 entities linked to the controversial S Alam Group. The court also issued a rule asking why Bangladesh Bank’s inaction in preventing the concentration of Islami Bank’s shares under the control of the 24 entities should not be declared illegal. The rule and order were issued on August 30 by a High Court bench comprising Justice K M Kamrul Kader and Justice Md Lutfur Rahman after hearing a writ petition.

The rule also asks why necessary steps should not be taken to confiscate the excess shares under Section 14A(3) of the Bank Company Act. The writ was filed by Islamic Economic Research Bureau (IERB), one of Islami Bank Bangladesh’s founding shareholder institutions. Advocate Mohammad Shishir Monir, counsel for the petitioner, confirmed the information to Manabzamin on Friday. He said that under the Bank Company Act, no single family or group can hold more than 10 percent of the shares of a bank.

The writ petition stated that 24 entities associated with the S Alam Group have been exclusively controlling a total of 81.92 percent of Islami Bank’s shares as institutional shareholders.

The petitioner said the law contains a clear provision for Bangladesh Bank to confiscate shares held in excess of the prescribed limit. He further said that, as part of an interim order, the High Court directed that the 81.92 percent of shares held in the names of the 24 entities be frozen for three months.