Why sponsor-directors are leaving SBAC Bank
Both present and former chairpersons faced corruption investigations
Corruption investigations against the present and former chairpersons of South Bangla Agriculture and Commerce (SBAC) Bank have sparked concerns of financial loss and prompted some sponsors and directors to cut ties with the bank.
The Bangladesh Bank has already asked for the loan details of present Chairman Abdul Kadir Molla while the preceding chairman SM Amzad Hossain left the country last year following an Anti-Corruption Commission decision to investigate allegations of money laundering.
Since its public listing only last year, the bank's share price peaked at Tk25 but has now fallen to Tk10.60 and only floor pricing appears to have prevented further declines. In September, the bank's default loans stood at 5.72%.
On 20 December, former sponsor director Tahmina Afroz announced offloading 3.48 crore shares of the bank and these will be sold within 30 days in the Dhaka Stock Exchange (DSE) block market at current market price making their total worth Tk73.82 crore.
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Tahmina is the wife of Anwar Khan, the founder of Anwar Khan Modern Medical College Hospital, and the two also co-own Hazi Shakhawat Anwara Eye Hospital. At present, Hazi Shakhawat Anwara Eye Hospital has a director at South Bangla Bank but sold 3.48 crore shares of the bank on 7 December.
Two directors of Ratanpur Steel Re-Rolling Mills Limited (RSRM) are also set to sell shares of the bank. Regulations bar selling of SBAC shares till about July 2024, but exemptions are allowed on special applications and the aforementioned offloaders have already secured exemptions.
However, Bangladesh Securities and Exchange Commission (BSEC) claims those buying the shares will also be bound to the three-year lock-in period.
Officials of BSEC and South Bangla Bank have failed to provide the reasons behind the sales.
Earlier, on 12 September, RSRM Managing Director Maksudur Rahman also sold 2.58 crore shares of the bank for Tk22 crore. He, however, cited the need to finance RSRM operations as the reason for selling South Bangla Bank shares.
Since its founding in 2013, SM Amzad Hossain remained the chairman of South Bangla Bank until he got embroiled in financial scandals last year. His acquaintance Captain M Moazzam Hossain and wife Begum Sufia Amjad were also named directors of the bank.
Under Amzad's leadership the bank was listed at the Dhaka Stock Exchange in July 2021.
Later, a Bangladesh Bank investigation found evidence of corruption and money laundering against SM Amzad Hossain and Captain M Moazzam Hossain. In March 2021, the Bangladesh Financial Intelligence Unit (BFIU) froze the bank accounts of Amjad, his wife Sufia Amjad, and daughter Tazri Amjad, on money laundering allegations.
On 19 August last year, the Anti-Corruption Commission (ACC) decided to investigate the allegations against Amjad Hossain and Captain M Moazzam.
According to the corruption fighting agency, Amjad allegedly embezzled a huge sum of depositors' money. In September 2021, he stepped down as the bank's chairman citing personal reasons. Later, his wife and Captain M Moazzam also stepped down from their respective roles in the bank.
An arrest warrant was subsequently issued against Amjad, but he managed to flee to the US beforehand. Abdul Kadir Molla took charge of the South Bangla Bank board but he also faces probes.
