Islami Bank crisis deepens as two directors quit

Two independent directors of Islami Bank Bangladesh Ltd (IBBL) resigned from the board yesterday, two days after they were removed from their executive posts.

They are Syed Ahsanul Alam, vice-chairman of IBBL, and Abdul Mabud, chairman of risk management committee of the bank.  

"I have received resignation letters from these two directors today [yesterday],” Arastoo Khan, chairman of IBBL, confirmed The Daily Star over the phone.

A board meeting would be called soon over the issue, and the two directors' resignation letter would be placed before the board, he said.

Arastoo said both directors resigned on personal grounds.

Earlier, IBBL at its board meeting held after the annual general meeting (AGM) on Tuesday removed Alam and Mabud from their executive posts. But the meeting decided that they would continue as directors in the bank.

The board meeting also approved inclusion of one more director from Saudi-based Al-Rajhi Co in the Islami Bank board, taking the number of directors to 20.

On May 11, Alam wrote in Facebook that he was under pressure from some quarters to resign from the post.

Later, a media release issued by a group of seven directors threatened to step down if any of them was made to resign under pressure.

On May 18, at a press conference, the IBBL chairman alleged that the bank's vice-chairman violated his oath by spreading propaganda about the bank.

He claimed that Ahsanul gave wrong information to the media about the Zakat fund, scholarships and Iftar expenditure.

The rift in the board of the bank came less than five months after a major change had been made to the board and top management.

In January, the IBBL appointed Arastoo as the new chairman and brought major changes to its key positions.

At the time, Ahsanul was also elected as the vice-chairman.

The conflict stems after the bank declared 10-percent dividend on April 2 for 2016 against a net profit of Tk 450 crore.

Some of the directors believe that the board gave “the meagre dividend” to see the bank's share price go on a “free fall” so that a Chittagong-based big business group can buy the shares on the cheap.

While the AGM was in progress on Tuesday, the Islamic Development Bank, one of the founding members of Islami Bank, declared it would sell 8.70 crore shares out of its total holding of 12.08 crore shares in the bank at the current market price.

In a parallel development, Excel Dyeing and Printing Limited, one of the seven companies that became corporate directors in the bank last year, announced its intent to buy over 3.2 crore shares in Islami Bank within next 30 days.

Both declarations came on Dhaka Stock Exchange website on Tuesday.

Excel Dying which has a representative in the board of the Islami Bank has completed its buy of shares worth over Tk 105 crore within two days of declaration.