Amar Bond, Sukuk scam: Salman F Rahman, Shibli Rubayat banned from market for life
Salman’s Beximco raised Tk4,000 crore from the capital market through two bonds
The Bangladesh Securities and Exchange Commission (BSEC) has imposed lifetime bans from participating in the capital market on Salman F Rahman, vice chairman of Beximco Group and former private industry and investment adviser to ousted prime minister Sheikh Hasina, Salman's son, Ahmed Shayan Fazlur Rahman, and former BSEC chairman Shibli Rubayat-Ul-Islam.
The decision was made primarily due to irregularities found in raising Tk1,000 crore by selling the IFIC Amar Bond, according to a press release issued by the securities regulator today (30 July).
Although the Amar Bond was issued by Sreepur Township Ltd, a Beximco Group company, the commission declared those involved persona non grata for misleading investors by using IFIC Bank's name in the sale.
When the bond was issued in 2023, Salman F Rahman was the chairman of IFIC Bank, while his son, Ahmed Shayan Fazlur Rahman, served as the bank's vice-chairman.
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Both have been fined Tk100 crore and Tk50 crore, respectively, for their roles in what the BSEC described as one of the most egregious cases of investor deception involving the IFIC Guaranteed Sreepur Township Green Zero Coupon Bond.
The BSEC has also declared its former chairman, Prof Shibli Rubaiyat-ul-Islam, persona non grata for life, while former commissioner, Dr Sheikh Shamsuddin Ahmed, has been banned for five years for procedural violations tied to both the IFIC Amar bond and the Beximco Green Sukuk, the first-ever asset-backed securities.
The commission found evidence of regulatory violations and abuse of power in raising Tk3,000 crore through the Beximco Green Sukuk, often referred to as a Shariah-compliant bond.
A rare act of self-accountability
The BSEC has, for the first time since its inception in 1993, declared former top officials persona non grata.
"This is the first time in the commission's history that punitive decisions have been taken against former top officials — chairmen or commissioners. No prior commission has taken such decisions against their predecessors," BSEC spokesman Abul Kalam told TBS today.
The decision follows months of internal investigations by a BSEC-formed inquiry committee, which uncovered serious regulatory breaches, deceptive promotions, and misuse of institutional identities to lure investors into risky and poorly disclosed financial products.
According to the press release, the BSEC will also conduct separate investigations into the Amar Bond and Sukuk, and will take appropriate action against those found responsible for irregularities or violations.
Tk4,000cr drawn from the market
Beximco Group raised a total of Tk4,000 crore from the capital market through the issuance of two instruments — Sukuk and Amar Bond – in 2021 and 2023.
After the pandemic, this huge capital raised from the stock market flowed into this group's firms, contributing to a market downturn. Since last August's government change, these entities have become largely inactive.
Mayanagar Township, Sreepur Township Ltd's flagship real estate project, has seen little progress beyond basic infrastructure and faces financial crisis.
While the Teesta Solar Park, funded by Sukuk bonds, is operational, another project remains unfinished with no set completion date.
Beximco Ltd is required to repay nearly Tk 2,800 crore from the Sukuk bond by December next year. Despite Teesta's operation, concerns persist over repayment as Beximco is partially shut down.
Since the government change, Salman F Rahman has been arrested and is in custody; his son Shayan Fazlur Rahman remains at large. Former BSEC chairman Shibli Rubaiyat-ul-Islam is also jailed over a graft case filed by the Anti-Corruption Commission (ACC).
A name long associated with stock manipulation
Salman F Rahman is accused of pressuring institutional investors, particularly banks, to invest in Beximco Ltd's Sukuk, using his political influence to secure capital through favourable policies.
The BSEC found several irregularities in the bond's approval and subscription process, including granting regulatory exemptions to Beximco and unlawfully extending the public subscription period through alleged abuse of power.
After the 2010 stock market crash, the then-Awami League-led government formed a probe committee led by Khondkar Ibrahim Khaled. The committee named 60 individuals, including tycoon Salman F Rahman, who were found to have amassed wealth through stock market manipulation.
BSEC warns of further punitive actions
BSEC spokesman Abul Kalam said, "This decision was taken because investors were deceived during the sale of the Amar Bond."
He said, "Various irregularities occurred during the approval process of the Tk3,000 crore Green Sukuk, but the then commission took no action. The bond application was approved within four months of the company's formation, which was an abuse of power."
"More punitive actions will follow. The commission is also conducting separate investigations into the two bonds issued by the Beximco Group. If evidence of irregularities or fraud is found against those involved in those investigations, actions will be taken against them as well," the BSEC spokesperson added.
The backstory of IFIC Amar Bond
Sreepur Township Ltd raised Tk1,000 crore from the capital market through a five-year zero-coupon bond to fund the Mayanagar Township housing project near Gazipur's Kashimpur. They promised to repay Tk1,500 crore against the raised capital.
In April, the Anti-Corruption Commission (ACC) filed cases against former IFIC Bank chairman Salman F Rahman, his son Shayan Fazlur Rahman, and former BSEC chairman Shibli Rubaiyat-ul-Islam for allegedly embezzling the Tk1,000 crore raised through this bond fraudulently.
Though IFIC Bank was only the guarantor, the bond was aggressively marketed under the misleading brand "IFIC Amar Bond," creating the false impression that IFIC Bank was the issuer.
Sreepur Township Ltd, incorporated just months before applying, withdrew Tk248 crore within four days of capital raising, creating suspicion.
Several people and institutions have also faced action. IFIC Bank PLC, along with several of its former nominated and independent directors – ARM Nazmus Sakib, Golam Mostafa, Zafar Iqbal, Quamrun Naher Ahmed, and Shudhangshu Shekhar Biswas – received official warnings.
The credit rating agency Emerging Credit Rating Ltd (ECRL), which rated the bond, was fined Tk10 lakh. Additionally, the then CEO of IFIC Investment, Imran Ahmed, was also banned for five years.
The Mayanagar Township project plans about 7.6 million sq ft of commercial and affordable residential space over 37 acres, with a projected cost of Tk 6094 crore and expected revenue of Tk 6585.9 crore over five years.
Currently, the project has seen little progress beyond land development. After the government change in August 2024, local unrest caused damage to the project site, machinery, and assets. The company is financially strained, with limited activity due to the absence of senior officials.
Background of Sukuk
In 2021, Beximco Limited raised Tk3,000 crore through the convertible or redeemable asset-backed green sukuk: Tk1,500 crore from a private offering, with Tk750 crore from existing shareholders and Tk750 crore via IPO.
The plan was to repay capital using income from three Sukuk-funded projects: two solar parks and a Textile Division expansion. However, only Teesta Solar Limited, supplying 200MW to the national grid, is operational.
Korotoa Solar Limited has not started, and Beximco's textile expansion, requiring Tk800 crore, has stalled due to complications following the government change.
Therefore, Teesta Solar is the only active project funded by the Sukuk.
