Curious case of Chittagong connection | The Daily Star
12:00 AM, June 14, 2017 / LAST MODIFIED: 12:00 AM, June 14, 2017

Curious case of Chittagong connection

Little known firm gets seat on Islami Bank board

Another little known Chittagong-based company, JMC Builders Ltd, has secured a position on the board of Islami Bank, the largest private commercial bank that drew a lot of attention after major changes in key positions in January.

The company bought over 2 percent shares recently at the market price through stock exchange and nominated a representative on the board, confirmed Arastoo Khan, chairman of Islami Bank. Arastoo also represents a Chittagong-based company, Armada Spinning Mills Ltd.

JMC Builders spent about Tk 100 crore to buy over 3 crore shares at prevailing average market price of Tk 30 each to get a seat on the board.

Muhammad Shahabuddin Chuppu, a former commissioner of the Anti-Corruption Commission (ACC), has been chosen as the representative of JMC Builders on the Islami Bank board.

The decision was taken at a board meeting on May 31. The bank got approval from Bangladesh Bank to this effect last week.

The board also decided to appoint Shahabuddin as vice-chairman of the bank as a replacement of Syed Ahsanul Alam, who was removed from the post on May 23.

Earlier that day, at the annual general meeting, it was decided that the bank would have one vice-chairman, instead of two.

A foreign shareholder-director, Yousif Abdullah Al-Rajhi, has been holding the other post of vice-chairman much before Alam was removed.

Through the appointment of Shahabuddin, the board has in fact backtracked from its earlier position less than within a month.

Interestingly, Shahabuddin seems to know nothing about JMC Builders though he is representing the company.

“I am not related with any builders company,” said the new director.

He said he learned that a decision was taken to make him director of Islami Bank but he did not get any document in this regard.

“I heard about the company but I have no interest to know the details about it,” he said.

JMC Builders registered with the office of the Registrar of Joint Stock Companies and Firms in 2011 and its office is located in Khatunganj of Chittagong. The company, however, is not a member of the Real Estate and Housing Association of Bangladesh (REHAB), the industry lobbyist group. 

Jamal Mustafa Chowdhury, Rokia Yasmin and Mohammed Hashem were involved with the company during its inception, but details about them were not available. Yasmin and Hashem left the company recently, according to the Registrar of Joint Stock Companies and Firms.

Six more companies based in Chittagong have representatives on the board. They are: Paradise International, Platinum Endeavors, BLU International, ABC Ventures, Grand Business, and Excel Dyeing & Printing. The six companies together hold 12 percent stake in the bank.

Meanwhile, foreign sponsor Kuwait Finance House, which has 17 percent stake in the bank, has expressed its interest to put its representative on the board.

Currently, three foreign directors sit on the board -- two from Al-Rajhi company and one from the Islamic Development Bank (IDB).

“We have decided to include one more director from Kuwait Finance House to balance the number of foreign and local directors,” said Arastoo.

Earlier on May 25, two independent directors Syed Ahsanul Alam and Abdul Mabud resigned from the board as both of them were removed from their executive posts after the AGM. Mabud was chairman of the risk management committee of the bank. 

SHARE  TRANSACTION

On May 23, the IDB expressed its intention to sell 86,939,960 shares or 5.4 percent of its total holdings of 120,788,585 shares.

Two days later, Excel Dyeing announced that it bought 32,038,814 shares, which amounts to about 2 percent of the total shares of Islami Bank.

Later, Excel Dyeing offloaded 96,60,000 shares in the stockmarket out of its total holdings of 6,43,53,914.

Islami Bank's share price was downward during the transaction. Its share traded between Tk 31 and Tk 33 from May 22 to May 28 when the shares changed hands. The price is way lower than the price of Tk 48 in January. Yesterday, its share traded at Tk 30.70 in the stock market.

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