Curious case of Chittagong connection

Another little – known company in Chittagong, JMC Builders Ltd, obtained a position on the board of directors of Islami Bank, the largest private commercial bank that attracted much attention after major changes in Key positions in January.

The company has bought more than 2 percent of shares recently at market price through a stock exchange and appointed a representative to the board, confirmed Arastoo Khan, President of Islami Bank. Arastoo also represents a company based in Chittagong, Armada Spinning Mills Ltd.

JMC Builders spent on Tk 100 crore to buy more than 3 Crore shares at the current average market price of Tk 30 each to get a seat on the board.

Muhammad Shahabuddin Chuppu, former commissioner of the Anti-Corruption Commission (ACC), was chosen as representative of JMC Builders on the advice of Islami bank.

The decision was made at a meeting of the board of directors on 31 May. The bank obtained approval from the Bank of Bangladesh for this purpose last week.

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

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

A foreign shareholder leader, Yousif Abdullah Al-Rajhi, holds the other post of vice president before Alam is abducted.

Through the appointment of Shahabuddin, the board of trustees actually retreated from his previous position less than a month.

Interestingly, Shahabuddin seems to know nothing about JMC Builders although it represents the company.

"I am not tied to a company of builders," said the new director.

He said that he learned that a decision was made to make him director of the Islami bank, but he did not receive any document in this regard.

"I have heard about the company, but I have no interest in knowing the details about it," he said.

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

Jamal Mustafa Chowdhury, Rokia Yasmin and Mohammed Hashem were involved in the company during its creation, but details about it were not available. Yasmin and Hachem left the company recently, according to the Registrar of Corporations and Partnerships.

Six other 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 a 12% stake in the bank.

Meanwhile, foreign sponsor Kuwait Finance House, which holds 17% of the bank, has expressed interest in placing his representative on the blackboard.

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

"We decided to include another director of Kuwait Finance House to balance the number of foreign and local administrators," said Arastoo.

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


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

Two days later, Excel Dyeing announced that it bought 32,038,814 shares, accounting for about 2% of the total shares of Islami Bank.

Later, Excel Dyeing discharged 96 60,000 shares in the stock market of its total of 6,43,53,914.

The Islami Bank share price declined during the transaction. Its shares traded between Tk 31 and Tk 33 from 22 May to 28 May when the shares changed hands. The price is well below the price of Tk 48 in January. Yesterday, its share is traded at Tk 30.70 on the stock market.

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