Business tycoons siphoned $17b out of banks: BB governor tells FT

The governor said Mohammed Saiful Alam, founder and chair of industrial conglomerate S Alam, and his associates had "siphoned off at least $10bn "as a minimum" from the banking system after taking control of banks with the help of the DGFI.

Bangladesh Bank Governor Ahsan Mansur has said the Directorate General of Forces Intelligence (DGFI) had helped force takeovers of leading banks. 

In an interview with the Financial Times, the BB chief accused tycoons linked to the toppled regime of Sheikh Hasina of working with members of the country's powerful military intelligence agency to siphon $17bn out of the banking sector during her rule.

Mansur said an estimated Tk2 lakh crore ($16.7bn) had been spirited out of Bangladesh after the bank takeovers, using methods such as loans made to their new shareholders and inflated import invoices. 

"This is the biggest, highest robbing of banks by any international standards," he said. 

"It didn't happen on that scale anywhere, and it was state-sponsored, and it couldn't have happened without intelligence people putting guns [to former bank CEOs'] heads." 

The governor said Mohammed Saiful Alam, founder and chair of industrial conglomerate S Alam, and his associates had "siphoned off at least $10bn "as a minimum" from the banking system after taking control of banks with the help of the DGFI. 

"Every day, they were granting loans to themselves," he said.

In a statement issued by law firm Quinn Emanuel Urquhart & Sullivan on behalf of Saiful Alam, the S Alam Group said there was "no truth" to Mansur's allegations.

"The coordinated campaign of the interim government against the S Alam Group and several other leading businesses in Bangladesh has failed to respect even basic principles of due process," it said.

"It has already undermined investor confidence and contributed to the deterioration of law and order," the statement said. "Given the Group's record and contributions, we find the accusations by the governor ... surprising and unjustified."

Financial Times said the Inter-Services Public Relations Directorate, which handles media inquiries for Bangladesh's armed forces, did not respond to its request for comment, and the DGFI could not be reached for comment.

The BB chief told the FT last month that he had sought the UK's help to probe the overseas wealth of Sheikh Hasina's allies and that board members of leading banks had been targeted under her rule.

The board members were "hijacked from their houses" by intelligence officials, taken to other locations such as hotels, and told "at gunpoint" to sell all their shares in the banks to "to Mr S Alam" and to resign their directorships. 

"At one bank after another, they did it," he told FT. 

One former bank CEO told the FT he had been forced to resign the position as part of a forcible takeover. 

Mohammad Abdul Mannan, formerly CEO of Islami Bank Bangladesh, one of the country's largest lenders, said he came under pressure from "people associated with the then-government" from 2013.

This included pressure to recruit board members suggested by the prime minister's office and a search by "people related to government agencies" of a hotel room used by one of the bank's foreign directors.

Mannan said that in January 2017 he was diverted on his way to a board meeting and taken to see a senior defence official, then kept for a full working day to force him to resign.

"They prepared bank letters on fake stationery," said Mannan, who was appointed chair of First Security Islami Bank by the central bank in September. "I had to sign a resignation letter."