Islami Bank shake-up followed foreign partners' insistence, Muhith says

Foreign partners' bidding is what drove the changes at the top of Islami Bank Bangladesh Limited, which had been known to be controlled by Jamaat-e-Islami, the finance minister has said.

AMA Muhith says Islamic Development Bank (IDB) had once considered selling off its shares in the Islami Bank, but has now decided to keep its stakes after changes in the ownership.

"Many things happened... the changes that have been made, those followed pressure from them (foreign partners)," he told reporters at the ministry after a meeting with the Metropolitan Chamber of Commerce and Industry on Sunday.

The biggest shuffle in a series of changes in ownership, directorship and management of the Islami Bank were brought in the 240th meeting of its board of directors last Thursday.

Former secretary Arastoo Khan has been made chairman while another former secretary, Syed Manzoorul Islam, has been appointed Islami Bank Foundation chairman.

Ibn Sina Trust representative Mustafa Anwar, known to be a Jamaat loyalist, had been in the two posts. He has also left the director's post.

He, Abdul Mannan and Azizul Haq stepped down as Islami Bank chairman, managing director and vice-chairman, respectively, on health grounds on Thursday.

Deputy Managing Director Mahbubul Alam is acting managing director while Syed Ahsanul Alam Parvez filled the post of Azizul. Yousif Abdullah Al-Rajhi has retained the position of another vice-chairman.

When his attention was drawn to the changes, Muhith told the reporters: "I can't give you comment yet...I have to watch and I have talk to new management. I will talk to them shortly. It looks good you see, I think."

"No no...Islami Bank is the number one bank in the country in terms of business. Credit to them that they have done it," Muhith replied when asked whether the changes will largely affect the bank's activities.

"But there had long been some questions surrounding them...like where the profit goes, how it is used...." he added.

The finance minister said the IDB president drew his attention to the issue around two years ago.

"It has been under watch since then. A foreign partner has changed. The original partner is no longer there. This has been taken over by a new partner," he added.

The foreign sponsors of the Islami Bank are: 
 
Islamic Development Bank, Jeddah, KSA; Kuwait Finance House (KSC), Kuwait; Jordan Islamic Bank, Jordan; Islamic Investment & Exchange Corporation, Doha, Qatar; Bahrain Islamic Bank, Bahrain; Islamic Banking System International Holding SA; Al-Rajhi Company For Currency Exchange & Commerce, KSA; Sheikh Ahmed Salah Jamjoom, Jeddah, KSA; Fouad Abdulhameed Al-Khateeb (Late), KSA; Dubai Islamic Bank, Dubai, UAE; The Public Institution For Social Security, Safat, Kuwait; Ministry of Awqaf And Islamic Affairs, Kuwait; and Ministry of Justice, Department of Minors Affairs, Kuwait.

Media reports have said founding sponsors Bahrain Islamic Bank and Dubai Islamic Banks are selling most of their shares in the bank.
 
The local sponsors of the bank include Ibn Sina Trust, Baitush Sharaf Foundation Ltd, Bangladesh Islamic Centre and Islamic Economic Research Bureau, which have no representative in the bank's Board of Directors. 
 
About discussions that a local firm is taking over the bank, Muhith said, "Changing hands to a local business group? I don't know. I can't say. I can't say yet which groups are involved in it."  
 
He also said he did not know whether any more big change in the bank is coming. "But common sense dictates that big changes are supposed to take place after changes to the posts of chairman and MD," he added.
 
Those demonstrating for war crimes trial have been vocal against some Jamaat-e-Islami leaders being involved in the bank.
 
Jamaat leader Mir Quasem Ali, a founding vice-chairman of the bank, has been hanged for war crimes.
 
Bangladesh Bank has also been monitoring the Islami Bank for allegedly funding militancy. An observer was appointed to the bank in 2010.