Former SIBL chairman announces plan to purchase 18.30 lakh shares to meet 2% shareholding requirement

Sultan Mahmood Chowdhury, sponsor and former chairman of Social Islami Bank Limited (SIBL), announced his intention to purchase 18.30 lakh shares of the bank to meet the minimum shareholding requirement of 2% required to qualify as a director.

In his announcement through the Dhaka Stock Exchange (DSE), Sultan Mahmood said he will buy the bank’s shares in the public market at the prevailing market price until October 31.

Earlier, in September, he bought 18 lakh shares, taking his total stake in the bank to 1.8396%.

After the purchase of the declared shares is completed, your participation will increase to 2%. Under the Banking Companies Act, an individual must hold at least 2% of the bank’s shares to qualify as a director.

Shares of SIBL closed at Tk 10.80 on Monday, 4.42% lower than the previous session on DSE.

In early August, Bangladesh Bank dissolved SIBL’s board of directors and formed a new five-member board. Sultan Mahmood was the bank’s chairman in 2010.

Since 2017, SIBL has been controlled by Grupo S Alam, a business conglomerate with a history of alleged irregularities and corruption.

The S Alam Group is allegedly involved in irregularities and corrupt practices within SIBL, particularly in the areas of recruitment and loan disbursement. Following the allegations, the central bank dissolved the SIBL board.

According to a confidential Bangladesh Bank report, SIBL concealed Tk 7,936 million worth of non-performing loans with the help of a central bank official.

According to the inspection report, at the end of December 2023, non-performing loans amounted to Tk 9,568 million, but SIBL reported only Tk 1,644 million to the money market regulator.

Bangladesh Bank initially concealed the true financial status of SIBL. Later, the central bank reported that the bank’s total provisioning requirement was Tk 1,370 million, of which Tk 1,306 million had been covered, leaving a deficit of Tk 64 million.

Its consolidated earnings per share stood at Tk 0.53 at the end of the first half of this year. For the year 2023, the company paid cash dividend of 5% and share dividend of 5%, with a consolidated net profit of Tk212 million.