Auditors to face action over zeroed bank shares: Salehuddin

Finance Adviser Dr Salehuddin Ahmed today (13 January) said the auditors of five banks whose shares have recently been written down to zero would face action, as the government is examining the context in which shareholders purchased those shares.

The banks are First Security Islami Bank, Social Islami Bank Limited (SIBL), EXIM Bank, Global Islami Bank and Union Bank.

Talking to reporters after a meeting of the Advisory Committee on Government Purchase and Economic Affairs at the Secretariat, Salehuddin said the authorities are scrutinising the circumstances under which shareholders invested in these banks.

"We are examining in what context the shareholders bought the shares. And yes, action will be taken against the auditors of these five banks. That process is under review," he said.

Responding to a question on compensation for general shareholders, the finance adviser acknowledged that the issue is complicated.

Earlier, before the merger of the five banks, the government had indicated that the matter of compensating ordinary shareholders would be considered. However, the shares of the five banks have already been written down to zero as part of the restructuring process that led to the formation of a new bank.

"The issue of shareholders is complicated. You cannot just demand and expect a decision. These things cannot be decided so easily," he said.

Salehuddin emphasised that the government's priority is to protect depositors, saying their money would be returned in full.

"What we are saying is very simple – depositors will get their money. Anyone who has deposits will get their money back," he said.

He distinguished depositors and shareholders, noting that shareholders voluntarily invest in banks with an understanding of market risks.

"Shareholders bought shares in a certain context – whether at market price or otherwise. Shareholders wanted to be owners. They understand that this is voluntary," he said.

Journalists pointed out that many shareholders claim they purchased shares after reviewing audited financial statements, which showed profits in the period before 5 August 2024.

In response, the finance adviser said this was precisely the issue now under investigation.

"That is exactly what we are examining – under what context the shares were bought. We will see what can be done," he said.

Asked whether action would be taken against the auditors who approved the financial statements of these banks before 5 August, Salehuddin replied in the affirmative, but refrained from providing further details.

"Action will definitely be taken. It is under consideration. However, everything cannot be disclosed at this moment," he said.

The government has recently undertaken major restructuring measures in the banking sector, including the merger of several weak banks, as part of efforts to restore stability, improve governance and protect depositors' interests.