The central bank has just reconstituted the board of United Commercial Bank (UCB) for financial wrongdoings, but it has a darker past – a takeover at gunpoint by a politically influential family over a quarter of a century ago.

The saga of former land minister Saifuzzaman Chowdhury Javed's family that controlled the private bank's assets by force goes back to 1993 when Humayun Zahir, a director of the bank, was shot dead at his residence in Dhaka's Dhanmondi.

This dark chapter in the banking industry involved Akhtaruzzaman Chowdhury Babu, the late father of Saifuzzaman. Akhtaruzzaman and his son have a long history of involvement in the Awami League politics and were blessed by former prime minister Sheikh Hasina.

As the murder roiled the banking industry, Akhtaruzzaman, then the chairman of UCB, was arrested in the case but he fled the country after securing bail. He came back to Bangladesh in 1996 when the AL returned to power after 21 years in the political wilderness.

In 1999, members of this influential family along with armed men stormed the bank's headquarters where a board meeting was underway. The directors were abused verbally, assaulted and forced to sign their resignations. Bangladesh Bank then dissolved the entire board. Akhtaruzzaman returned to the bank's board of directors in 2010, a year after the AL was voted to power for the second time.

People familiar with those incidents say the takeover at gunpoint was one of the darkest chapters in Bangladesh's banking industry. It all started in 1991 after Bangladesh Bank removed Akhtaruzzaman from UCB board because of his failure to repay Tk 250 crore in loans that he took in favour of his own company.

Humayun Zahir, a director of the bank, protested when Akhtaruzzaman was reluctant to repay the loan despite being the chairman of the board. This is one of the oldest instances of defaulted loans in Bangladesh, said Sharif Zahir, son of Humayun Zahir.

"When my father protested and asked Babu [Akhtaruzzaman Chowdhury] to return the loan, he targeted my father," said Sharif, currently the managing director of Ananta, a leading garment exporter and business group.

Sharif alleged that the bank was taken over by Akhtaruzzaman along with his nephew and S Alam Group owner Mohammed Saiful Alam, who is also known for banking scandals on his own right.

Sharif was a large shareholder of the bank in 1993, 1995, 2008, 2009, 2010 and 2018, he said without mentioning the exact amount of his family shares with the bank. He also served UCB as the vice-chairman between 2013 and 2015.

However, in 2018, the first-generation private bank was taken over by force again, this time by Saifuzzaman, Sharif said.

The former land minister's family lost its grip on UCB on Tuesday as BB dissolved the lender's 18-member board.

The dissolved board was heavily dominated by Saifuzzaman's family members, including his sister Roxana Zaman Chaudhury and relatives Anisuzzaman Chowdhury and Asifuzzaman Chowdhury.

Saifuzzaman's wife, Rukhmila Zaman, had been serving as chairman of the bank until August 16, when the bank reconstituted the board on its own accord in an attempt to keep a portion of Saifuzzaman's family onboard, industry insiders say.

Sharif, who is now staying abroad, said he is coming back to Bangladesh in a day or two and plans to hold a meeting with the newly appointed directors to form a board to run the bank.

UCB was established in 1984 mainly by a group of Chattogram-based businesspersons, and was one of the high performing banks in Bangladesh.

Things started to change after the takeover by Saifuzzaman's family, as loan scandals became a norm rather than an exception.

The bank's defaulted loans rose to Tk 2,500 crore in 2023 from Tk 1,792 crore in 2016, although industry insiders say the actual figure is much higher.

In these seven years, the amount of written off loans more than doubled to Tk 2,471 crore from Tk 1,069 crore.

Meanwhile in the UK, Saifuzzaman acquired at least 260 properties, paying at least 134.76 million British pounds or Tk 1,888 crore, according to The Daily Star's calculation based on company filings that are publicly available on UK government websites.

The three-time AL lawmaker also has at least 537 mortgages against properties in the UK, a majority of which are in London.

The Bangladesh Financial Intelligence Unit found that Saifuzzaman and Rukhmila have also amassed huge fortunes in the US and Dubai.

A group of shareholders of the bank recently sent a letter to the central bank, alleging that although Rukhmila was the chairperson of the bank, it was Saifuzzaman who pulled the strings behind it all.