Salman F Rahman, one of Sheikh Hasina's trusted advisers with a ministerial rank, is now a disgraced suspect held in police custody.

He was arrested in a case over the killing of a shop employee, not for the financial misconduct he was known for.

Salman thrived on financial transgression, with his footprints in the stock market and the banking sector, now one of the beleaguered areas of the economy. Before his downfall, his last target was the country's burgeoning Islamic finance that he used to supercharge his business empire.

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Salman, Anisul to be produced before court today

His reputation took a severe hit as many familiar with his wrongdoing described him as "the father of loan delinquencies" in Bangladesh.

Salman was a lawmaker from Dohar and vice-chairman of the Beximco Group. He is also the chairman of IFIC Bank and holds key positions in many business associations.

Political analysts say he was one of the influential figures among the policymakers in the Awami League government.

Salman's Beximco Group created a huge risk for Janata Bank by borrowing a colossal amount, which was nine times higher than the state-run lender's paid-up capital. That's just one example.

Founded in 1972 by Salman and his elder brother as a commodity trading company, Beximco got its loan defaults rescheduled on many occasions by compelling the regulators to make or amend rules. It also shielded itself from prosecution by securing court orders in its favour.

One of the instances of loan restructuring or rescheduling was in August 2014 when Salman rescheduled Beximco's loans taken from Sonali Bank citing a liquidity crisis.

The company blamed the crisis on politically motivated credit restrictions between 2001 and 2008, repayment of Tk 800 crore in bank loans in the previous three years and economic disruptions during the prolonged spell of blockades and shutdowns in 2013-14.

With Tk 5,245 crore loans from seven banks at that time, Beximco, in a letter to the central bank, called for urgent debt restructuring to survive.

On January 29, 2015, the Bangladesh Bank issued a new large loan restructuring policy, under which the central bank entertained applications from borrowers of Tk 500 crore and above.

Some 11 business groups took the chance and restructured about Tk 15,000 crore of their default loans -- and Beximco alone accounted for a third of the amount, according to a report published by this newspaper at that time.

The borrowers were given a lenient rescheduling benefit of only a 1-2 percent down payment instead of the usual 10 percent and a maximum repayment tenure of 12 years. The policy allowed banks to withdraw the facility if any borrower failed to repay two consecutive instalments.

The BB also said the lenders may sue the borrowers in case of failure to repay the loans. The subsequent actions of Beximco showed that it did not bother.

Under the policy, state-owned Sonali Bank had restructured Tk 1,070 crore of Beximco's loans for 12 years to 2027 at an interest rate of 10 percent, which was much lower than the 13-14 percent interest rate prevailing then.

After a year's grace period, effective from September 2016, the borrower was supposed to pay Tk 57.4 crore each quarter to Sonali. By December 2017, the borrower was obliged to pay six instalments, but Beximco made only two payments. And it became a defaulter at the end of December 2017.

Sonali did not withdraw the facility, nor did it sue Beximco.

Instead, it rescheduled the loans given to Beximco again in March 2018. In doing so, Beximco was not required to make any down-payment although the BB's rules said at least a 10 percent down payment of the defaulted loans was necessary to restructure the loans.

Another example is halting the move by Sonali Bank to auction the property of Salman and his brother Sohail in August 2016 for the failure of GMG Airlines to repay loans. Beximco acquired half the equity stake in GMG, the country's first private carrier, in 2009.

After the state bank issued a notice in July to auction the property mortgaged against the loans, GMG went to the High Court and secured a stay order. The airline, which has been grounded for years, also managed to keep its accounts regular, thanks to a court order.

Ruined Debentures market

Salman is still accused of ruining the debentures market in Bangladesh as he delayed the repayment of around Tk 100 crore in funds that he raised in the 1990s.

A debenture is a type of debt instrument that is unsecured by collateral and investors rely on the creditworthiness and reputation of the issuer while corporations and governments issue debentures to raise capital or funds and pay interest for holding the debentures.

Beximco issued four debentures in 1994-95 for a tenure of 10 years. Although their tenure ended in 2004 and 2005, the issuer did not repay the funds to investors until 2021.

That year, Beximco was preparing to issue sukuk to raise Tk 3,000 crore. In this situation, Beximco's debenture defaulting issue was criticised, so the Bangladesh Securities and Exchange Commission ordered the company to repay the dues.

The company repaid the funds 15 years after the cut-off time.

Bond market

Salman's Beximco issued the country's largest sukuk in 2021 through which it raised Tk 3,000 crore.

However, the then private industry and investment adviser to the former prime minister of Bangladesh used his political leverage for the bond sales. No banks and non-banks were interested in subscribing to the bonds.

Salman pressurised institutional investors to invest in his sukuk. Despite that, many banks invested a low amount of funds. So, the Bangladesh Securities and Exchange Commission had to extend the subscription time at least twice.

He went as far as to change Bangladesh Bank's rules so that banks can invest in his sukuk.

To boost the stock market, the central bank formed a fund and banks were allowed to take loans of Tk 200 crore from the fund designed only for the stock market.

Salman forced the central bank to issue a circular allowing the banks to invest in sukuk. After that, Salman asked some banks to borrow funds from Bangladesh Bank and invest in his company's sukuk, according to people familiar with the development.

BNP today alleged that the government is hatching a conspiracy to create communal division in the country in a bid to catch fish in troubled water ahead of the upcoming general election slated to be held at the end of December.

“Awami League General Secretary Obaidul Quader recently said that a communal plot is being hatched in the name of national unity and the situation will be horrible if BNP comes to power. It is nothing but a plot to create a communal division,” BNP spokesperson Rizvi Ahmed said.

Speaking at a press conference at the party’s Naya Paltan central office in Dhaka, Rizvi, also senior joint secretary general of BNP, said minority groups become the worst victims of repression when Awami League comes to power.

Even their religious festivities come under attacks by the Awami League men, Rizvi alleged, citing several instances in this regard.

Referring to Prime Minister Sheikh Hasina’s recent comment that no one can halt the upcoming general election, Rizvi said the time of unseating of the government has already got momentum.

“Our movement for holding the next general election in a free, fair and inclusive manner and restoration of the destroyed democracy in the country will take a harsher turn if the government wants to ignore the demand of the mass people,” he warned.

Rizvi said over 400 leaders and activists of BNP were arrested from different parts of the country in the last two or three days when they were engaged in holding programmes on the occasion of the party’s 40th founding anniversary.

The government is suffering from a phobia of its immediate unseating and thus it has started a spree of arrests of the opposition party men by implicating them with politically motivated cases, the BNP leader added.

Salman F Rahman is known for using his influence to get bank loans for Beximco Group by bending rules, but documents seen by this newspaper have revealed how he helped others secure credit, or at least tried to.

The Beximco boss who worked for Sheikh Hasina as one of her trusted advisers until the downfall of the Awami League government was overly influential in the financial sector of Bangladesh.

His clout grew so large in the 15 years of Hasina's regime that his recommendations were difficult for anyone to disobey, said current and former chief executives of three commercial banks who sought anonymity in fear of reprisal.

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Salman F Rahman: ‘The architect of default culture’

Salman is now a disgraced suspect held in police custody over the killing of a shop employee during the violent student-led protests that toppled the Hasina government.

The current administration has not yet charged him with financial misconduct linked to Beximco, for which he has long been known.

Having been the chairman of the privately owned IFIC Bank, Salman had mostly picked state-run banks for his endeavour to facilitate loans for other companies. 

One such company Salman had helped, or tried to help, is Globe Janakantha Shilpa Paribar (GJSP), which sought and secured loans from scam-hit Janata Bank. 

A document obtained by The Daily Star shows that Salman had recommended loans for GJSP from the state-run bank at the height of the coronavirus pandemic. He wrote a letter to the chairman of Janata Bank on August 9, 2020, recommending Tk 250 crore loans as working capital for GJSP.

GJSP is a Bangladeshi conglomerate whose business interests range from construction to engineering, electrical cables, information technology, printing and media.

In the letter, Salman wrote that GJSP was forced to take loans because of the adverse effects of "dishonest political actions".

The loans were not enough to meet GJSP's requirements, a fact that caused the company to default in 2018, he said.

However, the loans were regularised with a low-interest incentive package provided by the government amid the pandemic, according to the letter.

Salman warned that GJSP would collapse if it failed to run its business in full swing because of a lack of funds. Janata Bank then approved the loans, documents show.

The board of directors of the bank was always positive about some influential clients, including Salman, against whom it had not taken any brave move, officials said.

Contacted for comment yesterday, its Chairman SM Mahfuzur Rahman claimed Salman's letter had not influenced the board's decision to approve loans for GJSP.

The board receives thousands of such recommendations for credit but its decisions are not based on these, Mahfuzur told The Daily Star.

Zereen Altaf, chief executive officer of Globe Janakantha Shilpa Paribar, said she did not have any information on Salman's recommendation for the loans.

As Salman is in police custody, The Daily Star contacted Beximco Group which declined the newspaper's request for comment.

Salman F Rahman, private industry affairs adviser to former prime minister Sheikh Hasina, former law minister Anisul Huq, former social welfare minister Dipu Moni and former top army official Major General Ziaul Ahsan are expected to be produced before a Dhaka court today on completion their remand in two murder cases.

"The remand period for the four accused has ended, and they are expected to be produced before the Chief Metropolitan Magistrate's Court of Dhaka by noon today," a sub-inspector at the court told The Daily Star around 11:30am.

On August 14, Salman and Anisul were placed on a 10-day remand in connection with the death of 24-year-old shop employee Shahjahan Ali during quota reform protests in Dhaka's New Market area on July 16.

Salman and Anisul were arrested on August 13 in Dhaka's Sadarghat area.

On August 16, Ziaul Ahsan was placed on an eight-day remand in the same case.

Ziaul was arrested from Dhaka's Khilkhet in the case on August 15. He was relieved of his post in the army on August 6.

Shahjahan Ali's mother, Ayesha Begum, filed a murder case on July 17 against some unnamed miscreants.

According to the case statement, Shahjahan was critically injured and died at Dhaka Medical College Hospital at 7:05pm while undergoing treatment.

Dipu Moni was placed on a four-day remand on August 20 in the case filed over the death of grocery shop owner Abu Saeed in Dhaka's Mohammadpur area on July 19.

She was arrested from Dhaka's Baridhara DOHS area on August 19.

On August 13, Amir Hamza Shatil, a resident of Mohammadpur, filed the murder case against Sheikh Hasina and six others.

Although Dipu Moni's name was not initially included in the First Information Report (FIR), she was later shown as arrested in the case.

The Bangladesh Bank yesterday constituted a new board of directors at IFIC Bank after dissolving the previous board, effectively bringing an end to Salman F Rahman's grip on the private commercial bank.

Salman, who served as the private investment affairs adviser to former prime minister Sheikh Hasina, had been chairman of the bank since 2015.

According to the circular, the central bank appointed two directors and four independent directors to the new board.

Md Mehmood Husain, former managing director of National Bank, Ebadul Islam, former executive director of Bangladesh Bank, Sajjad Zahir, a professor of economics at BRAC University, and Kazi Md Mahbub Kashem, a chartered accountant, have been appointed as independent directors.

Meanwhile, Md Golam Mustafa and Md Monzorul Haque, additional secretary and joint secretary respectively to the Finance Division, were made directors as government representatives.

The government owns 32.75 percent of the bank's shares.

Similar to how Mohammad Saiful Alam, owner of Chattogram-based conglomerate S Alam Group, weaponised his political influence to seize control of Islami Bank and several other Shariah banks, Salman, the vice-chairman of Beximco, used his connections to assert dominance over IFIC Bank.

Ultimately, both of them received the same wake-up call.

In recent weeks, Alam lost the control he had forcibly gained over six Shariah-based banks after the boards were reconstituted by the central bank.

The banks had been suffering from a severe liquidity crunch after S Alam Group and its associated companies took out Tk 95,331 crore between 2017 and June this year. Around 79 percent of the sum was withdrawn from Islami Bank alone.

Now, IFIC Bank has been liberated from Salman's influence through a similar reconstitution of the board.

Salman, a major shareholder of the bank, is currently in jail in connection with several cases filed over various irregularities during the Awami League's 15-year regime.

His son, Shayan Fazlur Rahman, lost his directorship at IFIC Bank due to loan defaults on August 13, just over a week after the fall of the Awami League government.

Allegations are rife that Salman misappropriated thousands of crores through loans and bonds from the bank after taking charge.

Salman's Beximco Group also owed Tk 25,000 crore to Janata Bank as at the end of June, which is about 950 percent of the lender's paid-up capital.

As much as 72 percent of Beximco's outstanding loans with Janata have been classified as default loans, according to Janata Bank documents.