S Alam Group’s control over all eight banks ended yesterday after the central bank reconstituted the boards of directors for Al-Arafah Islami Bank PLC (AIBL) and Bangladesh Commerce Bank Ltd.

Bangladesh Bank (BB) issued separate notices on Tuesday reconstituting board of directors of these banks.

Earlier, the central restructured the boards of six banks — Islami Bank Bangladesh, First Security Islami, Social Islami, Global Islami Bank, Union Bank, and National Bank.

BB yesterday appointed eight independent directors to the boards of Al-Arafah and Commerce banks, while two previously appointed directors were retained.

Khwaja Shahriar, former managing director of Lanka Bangla Finance, has been appointed as the chairman of the newly reconstituted board of directors at Al-Arafah Islami Bank.

The other independent directors appointed to Al-Arafah Islami Bank include Md Shahin Ul Islam, former executive director of the Bangladesh Bank, Md Abdul Wadud, former deputy managing director of NRB Bank, M Abu Yusuf, professor at the Department of Development Studies of Dhaka University and Mohammad Ashraful Hasan FCA.

Besides, the central bank appointed Md Ataur Rahman, former executive director of the Bangladesh Bank, Md Mohsin Miah, additional managing director of Meghna Bank and Sheikh Ashrafuzzaman FCA as independent directors to Bangladesh Commerce Bank.

In addition, Kamrul Haque Maruf, joint secretary at the Financial Institutions Division of the Ministry of Finance, and Md Golam Mortuza, deputy managing director of Janata Bank, who were previously appointed by the central bank, have been retained on the board of Commerce Bank.

The new boards have been constituted in these banks as per section 45 of the Bank Company Act, 1991 to protect the interests of depositors and ensure good governance, according to the central bank.

Earlier, BB governor Dr Ahsan H Mansur said the board of all banks owned by the controversial S Alam Group will be dissolved gradually.

S Alam Group forcefully took control of Islami Bank through share purchases in 2017.

In the same year, the Group took control of the social Islami Bank with the help of defence intelligence agencies. They took control over the Bangladesh Commerce Bank a year before. Besides, the Global Islami Bank and the Union Bank was under the control of the S Alam Group since their inauguration.

In January of that year, Islami Bank’s chairman, vice chairman and managing directors were detained by an intelligence agency. The bank was then forced to change its ownership. After that, the group took out unnamed loans from the bank, leading to its collapse.

The group took out Tk 750 billion from the bank, including Tk 670 billion alone from the Khatunganj branch in Chattogram.

Recently, Islami Bank officials launched efforts to free the banks from the clasp of S Alam Group after the change in the government.

A protest took place at the bank’s main offices in Motijheel over the control of the bank on August 11. Several bank officials suffered bullet injuries during the protest.

Subsequently, on August 19, the bank terminated the contracts of eight senior officials, including an additional managing director and deputy managing director closely associated with S Alam Group.

Finally, the Bangladesh Bank dissolved the board of directors of the Islami Bank Bangladesh PLC on 22 August.

The central bank has also formed a new board for Islami Bank Bangladesh with the appointment of five independent directors at the crisis-hit Shariah-based lender, according to a letter issued by the central bank today.

Md Obayed Ullah Al Masud, former managing director of Rupali Bank, has been appointed as the chairman of the board.

Following the reconstitution of the board, S Alam Group's grip over the Islami Bank ended after seven years of its domination and rampant misappropriation of nearly a hundred thousand crores of taka in the name of loans.

The central bank already reconstituted board of directors of Social Islami Bank, First Security Islami Bank, Global Islami Bank, and Union Bank, which partially or fully controlled by the Chattogram-based S Alam Group, owned by Saiful Alam Masud

Meanwhile, the Criminal Investigation Department (CID) of police has launched a preliminary investigation into allegations that S Alam Group's Chairman Saiful Alam Masud and his family laundered a massive Tk1.13 lakh crore abroad through deceptive tactics and informal money transfer channel — hundi.

CID officer Azad Rahman from its CID media wing told media that the Financial Crime Unit of the department is conducting the investigation.

Sources within the Financial Crime Unit said Saiful Alam, his wife Farzana Parvin, and their two sons have laundered money to various countries, including Singapore, Malaysia, and Cyprus, where they have purchased numerous movable and immovable properties "using the laundered funds."

Sources also said that S Alam established a company named Canaly Logistic Private Limited in Singapore, valued at Tk245.74 crore, with the laundered funds.

In addition, S Alam Chairman Masud allegedly laundered Tk95,000 crore abroad after obtaining loans from six Bangladeshi banks under various names, using false claims of export-import businesses and investments.

The group allegedly laundered Tk18,000 crore through offshore banking using a foreign shell company.

Sources indicate that Masud, along with his wife and children, jointly carried out these financial crimes with assistance from various individuals connected to his business interests.

The CID is also investigating whether money laundering has also occurred through companies owned by S Alam, in addition to those involving his family members.

CID officials concerned with the investigation said that over the past 15 years, S Alam Group has established numerous companies, both under their own name and anonymously, to facilitate money laundering activities.

The agency has initially identified 13 such companies owned by S Alam.

The CID's list of the companies are: S Alam Steel, S Alam Vegetable Oil, Sonali Trading Limited, S Alam Super Edible Oil, S Alam Cold Rolled Steel, S Alam Refined Sugar, Century Flower Mill, Aramit Limited, Unitex Spinning, Unitex LPG, Adil Enterprise, Sadia Enterprise, and Sunmoon Enterprise.