HC orders freezing 81.92% shares of Islami Bank

The High Court has issued a rule and ordered the freezing of 81.92 percent shares of Islami Bank Bangladesh PLC, allegedly held by S Alam-related entities through 24 companies.

Lawyer Mohammad Shishir Monir confirmed the matter on Friday, September 4. The order was passed on August 30 by a High Court bench comprising Justice KM Kamrul Kader and Justice Md Lutfar Rahman.

The writ petition was filed on behalf of Islamic Economic Research Bureau (IERB), a sponsor shareholder of Islami Bank. Senior Advocate Mohammad Shishir Monir argued the petition in court, assisted by Advocate Mohammad Saddam Hossain.

The petition stated that a substantial portion of Islami Bank's shares had been concentrated through 24 entities, violating Sections 14A and 14B of the Bank Companies Act, 1991. It claimed that these companies held a total of 81.92 percent of the bank's shares.

Under the law, no individual, family or group is permitted to hold more than 10 percent of a bank's shares. The petition alleged that S Alam-related entities had circumvented this provision and taken control of 81.92 percent of the bank's institutional shares.

The High Court has issued a rule questioning why Bangladesh Bank's inaction in seizing the excess shares should not be declared illegal. The rule also questioned why the central bank had failed to take steps to confiscate shares exceeding the legal limit under Section 14A(3) of the Bank Companies Act, 1991.

Additionally, as an interim measure, the court ordered the freezing of the 81.92 percent shares of Islami Bank held in the names of the 24 companies for three months.