Salman F Rahman, one of Sheikh Hasina's trusted advisers with a ministerial rank, is now a disgraced suspect held in police custody.

He was arrested in a case over the killing of a shop employee, not for the financial misconduct he was known for.

Salman thrived on financial transgression, with his footprints in the stock market and the banking sector, now one of the beleaguered areas of the economy. Before his downfall, his last target was the country's burgeoning Islamic finance that he used to supercharge his business empire.

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Salman, Anisul to be produced before court today

His reputation took a severe hit as many familiar with his wrongdoing described him as "the father of loan delinquencies" in Bangladesh.

Salman was a lawmaker from Dohar and vice-chairman of the Beximco Group. He is also the chairman of IFIC Bank and holds key positions in many business associations.

Political analysts say he was one of the influential figures among the policymakers in the Awami League government.

Salman's Beximco Group created a huge risk for Janata Bank by borrowing a colossal amount, which was nine times higher than the state-run lender's paid-up capital. That's just one example.

Founded in 1972 by Salman and his elder brother as a commodity trading company, Beximco got its loan defaults rescheduled on many occasions by compelling the regulators to make or amend rules. It also shielded itself from prosecution by securing court orders in its favour.

One of the instances of loan restructuring or rescheduling was in August 2014 when Salman rescheduled Beximco's loans taken from Sonali Bank citing a liquidity crisis.

The company blamed the crisis on politically motivated credit restrictions between 2001 and 2008, repayment of Tk 800 crore in bank loans in the previous three years and economic disruptions during the prolonged spell of blockades and shutdowns in 2013-14.

With Tk 5,245 crore loans from seven banks at that time, Beximco, in a letter to the central bank, called for urgent debt restructuring to survive.

On January 29, 2015, the Bangladesh Bank issued a new large loan restructuring policy, under which the central bank entertained applications from borrowers of Tk 500 crore and above.

Some 11 business groups took the chance and restructured about Tk 15,000 crore of their default loans -- and Beximco alone accounted for a third of the amount, according to a report published by this newspaper at that time.

The borrowers were given a lenient rescheduling benefit of only a 1-2 percent down payment instead of the usual 10 percent and a maximum repayment tenure of 12 years. The policy allowed banks to withdraw the facility if any borrower failed to repay two consecutive instalments.

The BB also said the lenders may sue the borrowers in case of failure to repay the loans. The subsequent actions of Beximco showed that it did not bother.

Under the policy, state-owned Sonali Bank had restructured Tk 1,070 crore of Beximco's loans for 12 years to 2027 at an interest rate of 10 percent, which was much lower than the 13-14 percent interest rate prevailing then.

After a year's grace period, effective from September 2016, the borrower was supposed to pay Tk 57.4 crore each quarter to Sonali. By December 2017, the borrower was obliged to pay six instalments, but Beximco made only two payments. And it became a defaulter at the end of December 2017.

Sonali did not withdraw the facility, nor did it sue Beximco.

Instead, it rescheduled the loans given to Beximco again in March 2018. In doing so, Beximco was not required to make any down-payment although the BB's rules said at least a 10 percent down payment of the defaulted loans was necessary to restructure the loans.

Another example is halting the move by Sonali Bank to auction the property of Salman and his brother Sohail in August 2016 for the failure of GMG Airlines to repay loans. Beximco acquired half the equity stake in GMG, the country's first private carrier, in 2009.

After the state bank issued a notice in July to auction the property mortgaged against the loans, GMG went to the High Court and secured a stay order. The airline, which has been grounded for years, also managed to keep its accounts regular, thanks to a court order.

Ruined Debentures market

Salman is still accused of ruining the debentures market in Bangladesh as he delayed the repayment of around Tk 100 crore in funds that he raised in the 1990s.

A debenture is a type of debt instrument that is unsecured by collateral and investors rely on the creditworthiness and reputation of the issuer while corporations and governments issue debentures to raise capital or funds and pay interest for holding the debentures.

Beximco issued four debentures in 1994-95 for a tenure of 10 years. Although their tenure ended in 2004 and 2005, the issuer did not repay the funds to investors until 2021.

That year, Beximco was preparing to issue sukuk to raise Tk 3,000 crore. In this situation, Beximco's debenture defaulting issue was criticised, so the Bangladesh Securities and Exchange Commission ordered the company to repay the dues.

The company repaid the funds 15 years after the cut-off time.

Bond market

Salman's Beximco issued the country's largest sukuk in 2021 through which it raised Tk 3,000 crore.

However, the then private industry and investment adviser to the former prime minister of Bangladesh used his political leverage for the bond sales. No banks and non-banks were interested in subscribing to the bonds.

Salman pressurised institutional investors to invest in his sukuk. Despite that, many banks invested a low amount of funds. So, the Bangladesh Securities and Exchange Commission had to extend the subscription time at least twice.

He went as far as to change Bangladesh Bank's rules so that banks can invest in his sukuk.

To boost the stock market, the central bank formed a fund and banks were allowed to take loans of Tk 200 crore from the fund designed only for the stock market.

Salman forced the central bank to issue a circular allowing the banks to invest in sukuk. After that, Salman asked some banks to borrow funds from Bangladesh Bank and invest in his company's sukuk, according to people familiar with the development.