Another corporate sponsor of Islami Bank Bangladesh, Bangladesh Islamic Centre announced its decision to sell off its entire holding of 3.4 million shares in the private lender.
Islami Bank's share has been stuck at Tk 32.6 each on the Dhaka Stock Exchange since May last year, meaning the shares to be sold would be worth Tk 111 million at the current market price.
Islami Bank is among the six companies with floor price still in effect.
Bangladesh Islamic Centre is willing to sell its stake in both public and block markets of the Dhaka Stock Exchange (DSE) within the next 30 working days, according to a stock exchange filing on Thursday.
However, it could not be known immediately why the corporate sponsor is leaving the bank.
Last year, four corporate shareholders of the bank sold off their entire holdings. Uniglobe Business Resources sold 75.20 million shares, Kingsway Endeavors 70.80 million, Armada Spinning Mills 32.36 million and Investment Corporation of Bangladesh 33.47 million shares of the lender.
While corporate sponsors of Islami Bank are selling off their holdings, institutional investors are grabbing these shares in the block and main market.
As a result, the Islami Bank's shareholding saw big changes since December 2022. The stake held by shareholder-directors fell by 28.30 per cent to 35.89 per cent by May this year. At the same time, the shareholding position of the institutions almost tripled to 42.99 per cent by May this year.
Market insiders said some little-known companies, which brought the shares, are concerns of Chattogram-based S Alam Group.
The United Arab Emirates-based BTA Wealth Management reportedly purchased above 34 million shares of the lender in the block market in May last year.
Also, JMC Builders, a concern of S Alam Group, bought 32.36 million shares of the bank, almost equivalent to the shares sold by Armada Spinning Mills, in June.
Ahsanul Alam, son of S Alam Group Chairman Mohammed Saiful Alam, was appointed as shareholder director of the bank as a nominee of JMC Builders last year.
Currently, he is serving Islami Bank Bangladesh as its chairman.
Islami Bank witnessed a massive change in its board and management towards the end of 2016. The board's chairman and managing director along with a number of directors were replaced overnight.
The representative appointed by Armada Spinning became the chairman of the bank at that time. Armada Spinning, a concern of the business giant S Alam Group, was one of the largest shareholders of the bank at the time of the change of ownership.
Several other independent directors joined the board as well, mainly coming from different entities of S Alam Group. Foreigners started leaving the bank soon after the plan for a changeover became public.
After the change of ownership, the bank fell into a major financial crisis due to mismanagement and internal conflicts. The chairman appointed by S Alam Group resigned, and the bank curtailed its lending activities due to a lack of funds. Many depositors also withdrew their funds from the bank.
Meanwhile, Islami Bank's quarterly profit dropped nearly 12 per cent year-on-year to Tk 498 million in the January-March quarter this year.
© 2024 - All Rights with The Financial Express
