S Alam Group, associates took Tk 95,000cr loans from six banks

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News Desk: Chattogram-based business giant S Alam Group and its associate companies took out Tk 95,331 crore between 2017 and June this year from six banks, with 79 percent of the sum coming from Islami Bank.

Founded in 1985 by Mohammad Saiful Alam, a relative of former Awami League politician Akhtaruzzanan Chowdhury Babu and former Land Minister Saifuzzaman Chowdhury, S Alam Group has grown into one the largest conglomerates in Bangladesh.

The conglomerate and companies with ties to it took Tk 74,900 crore from Islami Bank, where it has controlling stakes since 2017.

They took Tk 13,400 crore from state-run Janata Bank and Tk 4,200 crore from Social Islami Bank (SIBL), whose chairman Belal Ahmed is the son-in-law of S Alam Group chairman Alam. Five more relatives of Alam are on the board of SIBL.

Some Tk 2,000 crore was taken from Union Bank, whose board consists of Alam’s siblings Halima Begum, Osman Goni and Md. Rashedul Alam along with his wife Marzina Sharmin and nephew Mohammad Mostan Billah Adil.

S Alam Group and its associate companies took Tk 574 crore from Global Islami Bank, whose vice-chairman is Alam’s daughter Maimuna Khanam. Seven other relatives of Alam including his brother Shahidul Alam and sister Rokea Yasmin, are on the board of Global Islami Bank.

Some Tk 257 crore was taken from First Security Islami Bank (FSIBL), whose chairman is Alam himself. Alam’s wife Farzana Parveen and four other relatives are on the board of FSIBL.

The total amount of loans taken by S Alam Group and companies with ties to it from the banks is likely to be much higher, according to industry insiders.

Most of the loans were taken by bypassing banking rules and regulations, according to central bank documents.

Subsequently, the Bangladesh Bank yesterday restricted the lending activities of the banks save for Janata.

Of the amount taken from Islami Bank, Tk 26,000 crore was borrowed in the name of its subsidiaries, and the remaining amount was taken in the name of 29 companies with ties to S Alam Group such as Nabil Group, Desh Bandhu Group, Unitex Group and Anantex Group.

Islami Bank’s Khatunganj branch in Chattogram is particularly noteworthy: a staggering Tk 35,924 crore was taken from the branch through 10 companies, documents show.

S Alam Group and its shadow companies such as Nabil Foods, Nabil Auto Rice Mills, MS AJ Trade International and Anowara Trade International secured loans amounting to Tk 29,575 crore from the Rajshahi branch of Islami Bank.

Another Tk 23,900 crore was taken from Islami’s offshore banking unit and other branches over the years in violation of rules.

Rules were not followed by state-run Janata when extending loans to the business giant, whose interests range from commodity trading to fishery, from construction materials to real estate, from textiles to media, from intercity buses to shipping, and from power and energy to banks and insurance.

About Tk 10,449.45 crore was taken in the name of S Alam subsidiaries, with as much as 90 percent of the loans taken from Janata’s Sadharan Bima Corporate Branch in Chattogram.

Janata’s lending to S Alam Group breached the bank’s single borrower exposure limit by an alarming margin.

According to banking law, a bank is prohibited from lending more than 25 percent of its paid-up capital to a single party. At the end of June this year, Janata’s paid-up capital stood at Tk 2,314 crore.

The remaining Tk 2,950.55 crore was taken from Janata by its associate companies.

The amounts taken from SIBL, FSIBL, Union and Global Islami bank are likely to be higher when the loans taken by its associate companies are taken into account, according to industry insiders.

Alam; Subrata Kumar Bhowmik, executive director of S Alam Group; the managing directors of the six banks; and BB spokesman Md Mezbaul Haque could not be reached for comment.