Throughout history, various entities, from the East India Company to corporations like Sahara, Adani, and Destiny, have been involved in different forms of corruption. However, it’s almost unimaginable that a single group of companies, or their founder and family, could loot nearly 4% of a country’s total GDP. This is the case with S. Alam Group, one of Bangladesh’s largest conglomerates based in Chittagong. The group and its owner, Saiful Alam (widely known as S. Alam), stand accused of looting a staggering amount from Bangladesh’s banking sector, estimated to be more than Tk 2 trillion (Tk 200,000 crore). How did S. Alam manage to seize such an enormous amount of money? Let’s dive into the details in today’s discussion.
Overview
Saiful Alam Masud, popularly known as S. Alam, was born in the Patiya Upazila of Chittagong. He is the fourth among seven brothers and five sisters. His father, Mozaherul Anwar, was an official at Bangladesh Bank. After completing his education, S. Alam ventured into business in 1985. Personally, he is a father of three sons and one daughter.
His business journey began as an agent in the tin industry. After achieving success there, he expanded into the transportation business, where he thrived for a long time. He maintained good relations with political parties across the spectrum. Gradually, he diversified into cement, vegetable oil, sugar refining, textiles, garments, and real estate. When Sheikh Hasina’s government came to power, S. Alam expanded into the power generation sector. According to the company’s website, S. Alam Group now operates across various sectors, with total assets worth around Tk 1.33 trillion (Tk 132,918 crore). Notably, the real estate sector accounts for Tk 25,454 crore, power generation for over Tk 21,000 crore, textiles for Tk 21,350 crore, imports and trading for Tk 20,169 crore, and the edible oil sector for Tk 16,932 crore. S. Alam also holds a 28% stake in Islami Bank, valued at around Tk 2,000 crore, along with control over five other banks, an NBFI (non-banking financial institution), and an insurance company, estimated at Tk 2,000 crore.
Looting the Banks
S. Alam’s rise to immense wealth was marked by extensive looting and irregularities in various sectors, with the largest impact on Bangladesh’s banking sector. His dominance began with the takeover of Islami Bank, one of Bangladesh’s most reputable private banks. After the Awami League came to power in 2009, efforts to gain control of the bank began. However, the real takeover occurred on January 5, 2017, when, with the assistance of military intelligence, Islami Bank’s chairman, vice-chairman, and managing director were forcibly removed from their residences and taken to the military intelligence headquarters in Dhaka Cantonment. They were coerced into signing resignation letters, and replacements were appointed the same day. Later that year, on October 30, the Social Islami Bank Ltd. (SIBL) was taken over in a similar manner. Prior to the takeover, S. Alam Group had bought nearly 50% of the bank’s shares through 19 companies, violating the Banking Companies Act of 1991.
Despite the scheduled board meeting being set for SIBL’s head office, it was held under tight security at The Westin Hotel in Dhaka. According to The Daily Star, key board members, including former board chairman Md Rezaul Haque, executive committee chairman Md Anisul Hoque, and managing director Shahid Hossain, were not present. Instead, S. Alam Group’s chairman Saiful Alam Masud was in attendance, having forced the resignation of the board members through military pressure that same morning. Anwarul Azim Arif, the former vice-chancellor of Chittagong University, was appointed as the new chairman, while Belal Ahmed, the vice-chairman of NRB Global Bank and S. Alam’s son-in-law, was named executive committee chairman. Quazi Osman Ali, the additional managing director of First Security Islami Bank, was appointed managing director of SIBL. A director who attended the board meeting revealed anonymously that the former officials were barred from attending.
S. Alam also controls First Security Islami Bank, Al-Arafah Islami Bank, Global Islami Bank, Bangladesh Commerce Bank, and Union Bank. These banks were essentially turned into S. Alam’s personal money-printing machines. According to The Business Standard, S. Alam Group took loans worth around Tk 1.25 trillion (Tk 125,000 crore) from these banks. The Daily Star reported that the group alone borrowed around Tk 36,000 crore from Islami Bank’s Khatunganj branch and another Tk 29,575 crore from the Rajshahi branch. Furthermore, Tk 24,000 crore was taken from Islami Bank’s offshore banking unit. Many of these loans were funneled through the group’s subsidiaries and shell companies. After the government fell, Islami Bank officials were able to identify many of these loans as being linked to S. Alam through affiliated entities. The loans violated Bangladesh Bank regulations, which prohibit lending more than 25% of a bank’s paid-up capital to a single party. However, S. Alam Group continued to break this rule repeatedly.
In addition to Islami Bank, S. Alam Group borrowed nearly Tk 20,000 crore from five other banks. At Social Islami Bank, where his son-in-law is the chairman, S. Alam secured Tk 4,200 crore without any obstacles. Many members of the bank’s board are related to him. Union Bank, Global Islami Bank, and First Security Islami Bank also issued loans of Tk 2,000 crore, Tk 574 crore, and Tk 257 crore, respectively, to S. Alam’s companies. At Janata Bank, S. Alam borrowed Tk 13,400 crore through its subsidiaries, including Tk 10,450 crore from its general insurance branch in Chittagong. Additionally, Tk 2,950.55 crore was funneled through shell companies. Moreover, S. Alam secured Tk 4,619 crore in loans from National Bank through 13 companies, but Bangladesh Bank later forced National Bank to write off Tk 2,310 crore, and S. Alam repaid only Tk 2,308.90 crore.
According to The Business Standard, tax authorities found Tk 109,000 crore deposited in the accounts of S. Alam’s family members and businesses across six banks: Islami Bank, EXIM Bank, Al-Arafah Islami Bank, First Security Islami Bank, and National Bank. One of S. Alam’s companies, S. Alam Cold Rolled Steel Ltd., alone had Tk 83,706 crore in its accounts, most of which were loans. However, the company’s annual turnover is only Tk 400 crore, and its market share is less than 5%, raising suspicions about fraudulent activities.
Despite abundant evidence of financial irregularities, no action was taken against S. Alam, raising questions about the credibility of the central bank. However, following the fall of the government on August 5, the new administration began reshuffling the boards of the banks under S. Alam’s control, and lending restrictions were imposed. According to Prothom Alo, Islami Bank’s new board revealed that of the total Tk 175,000 crore disbursed by the bank, Tk 88,000 crore was taken by S. Alam Group, accounting for nearly half of the bank’s total loans. Since many of the loans were taken through proxy companies, this amount is likely even higher.
By the time the total borrowing by S. Alam Group is fully accounted for, the amount could reach Tk 2 trillion (Tk 200,000 crore). According to World Bank data, Bangladesh’s GDP in 2023 was USD 437.42 billion. Based on this, the loans taken by S. Alam Group amount to nearly 4% of Bangladesh’s GDP—an astonishing figure that highlights the massive scale of corruption within the country’s banking sector.
Money Laundering by S. Alam
In addition to looting billions of taka from Bangladesh’s banks under the guise of loans, S. Alam is also accused of laundering vast amounts of money abroad. Over the years, he allegedly funneled money out of the country, building immense assets in Singapore, Malaysia, and Cyprus. According to The Business Standard (TBS), S. Alam has been involved in money laundering since 2009. For over a decade, he gradually built an empire by establishing various companies in his and his wife’s names in Singapore.
Singapore Investments
In 2009, S. Alam founded Canali Logistics, later renamed Wilkinson International, with 30 million Singapore dollars (around Tk 300 crore) in paid-up capital. S. Alam held 70% of the shares, while his wife held 30%. Through this company, S. Alam invested heavily in purchasing real estate, particularly hotels and retail spaces. He invested around 700 million Singapore dollars (about Tk 6,300 crore), acquiring prominent properties in Singapore’s Little India and Serangoon areas. Some key investments include:
- Hilton Garden Inn, previously known as Grand Imperial Hotel Singapore, built at a cost of 248 million Singapore dollars.
- Holiday Inn Express in Serangoon, bought for 90 million Singapore dollars.
- Ibis Novena Hotel, worth 170 million Singapore dollars.
- A retail space in Centrium Square, Little India, covering 27,179 square feet, purchased for 135 million Singapore dollars.
All financial transactions were conducted through Singapore’s United Overseas Bank (UOB), as per data from Singapore’s Accounting and Corporate Regulatory Authority (ACRA). S. Alam, his wife Farzana Parveen, and several of his employees are listed as shareholders of these companies in Singapore. In official documents, both S. Alam and his wife declared themselves as citizens of Cyprus. In 2016, S. Alam purchased another company in Cyprus, ACLARE Investment Ltd, later renamed ACLARE International.
In 2019, he constructed a palatial mansion on 12,260 square feet of land in Merlimau, Singapore, at a cost of 30 million Singapore dollars (around Tk 300 crore). His offshore wealth-building continued with more investments in luxury real estate and companies in foreign countries.
Over-invoicing and Hundi Operations
According to TBS, S. Alam’s vast empire of wealth outside Bangladesh was built primarily through over-invoicing, where goods, particularly sugar, were imported at inflated prices, allowing him to launder money. His control over banks facilitated this process. In addition to over-invoicing, he is also accused of laundering money through hundi, an informal and illegal method of transferring funds.
Furthermore, Prothom Alo reports that S. Alam used under-invoicing and over-invoicing during import-export transactions and made significant investments abroad with the laundered money. Nearly Tk 95,000 crore, looted from Islami Bank and other domestic banks, is believed to have been laundered in this manner. Despite the scale of these illegal activities, the regulatory and financial systems under the Awami League government turned a blind eye, allowing S. Alam to continue his operations without facing legal consequences.
Legal Actions and Investigations
In 2023, following an exposé by The Daily Star about S. Alam laundering $1 billion overseas, the High Court of Bangladesh issued a Suo Motu ruling on August 6, 2023, ordering an investigation into S. Alam and his wife, Farzana Parveen, for unapproved foreign investments. The court gave two months for the submission of the investigation report. However, just a week after this directive, on August 12, 2023, legal notices were sent by the government to four national newspaper editors and eight journalists, who had reported on the S. Alam and Islami Bank loan scandals. The judicial system, under the influence of the ruling government, suppressed further publication of reports on S. Alam’s foreign assets.
After the fall of the Awami League government, the Criminal Investigation Department (CID) began investigating the laundering of $10.2 billion by S. Alam and his companies.
Tax & VAT Fraud
Not only did S. Alam fail to repay the loans he took from Bangladesh’s banks, but he also engaged in massive tax and VAT evasion. According to TBS, his net worth was declared as Tk 279.52 crore in the 2021-22 tax return, and his taxable income for that fiscal year was Tk 19.20 crore, against which he paid Tk 6.29 crore in taxes. Furthermore, S. Alam’s companies owe the Bangladesh government nearly Tk 7,000 crore in unpaid VAT and fines.
From 2019-20 to 2021-22, S. Alam Vegetable Oil Ltd. evaded Tk 1,917 crore in VAT, while S. Alam Super Edible Oil Ltd. evaded Tk 1,621 crore. The National Board of Revenue (NBR) fined the companies an additional Tk 3,531 crore for underreporting their sales figures in their VAT returns. For example, according to audit reports, S. Alam Vegetable Oil reported total sales of around Tk 12,726 crore over three fiscal years, but in its VAT return, it only disclosed sales worth Tk 2,402 crore, hiding around Tk 10,324 crore in sales and causing the government to lose Tk 1,347 crore in revenue.
Similarly, S. Alam Super Edible Oil Ltd. concealed large portions of its sales and raw material costs, leading to further VAT evasion. These frauds were committed by significantly underreporting their total sales and undervaluing raw materials in their VAT filings.
Forfeiting Citizenship
In order to avoid prosecution for his massive financial irregularities, S. Alam took preemptive measures to secure an escape route. On October 10, 2022, S. Alam renounced his Bangladeshi citizenship, along with his entire family, and applied for permanent residency as foreign nationals in Bangladesh. This process, which typically requires several approvals from various ministries, was completed in record time—just one day.
The Bigger Question
Despite generating over Tk 54,000 crore in revenue annually, with assets worth over Tk 1 trillion, why did S. Alam need to loot the banks for loans? He could have easily obtained loans from any bank legally for business expansion. However, instead of using the funds for legitimate business growth, S. Alam focused more on money laundering. While he had the opportunity to expand his business empire and create thousands of jobs in Bangladesh, he chose to empty banks and funnel the money abroad. The pressing question remains: why would someone of such immense wealth resort to such criminal behavior?
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