Former Al-Arafah Chairman Bodiur Rahman Entangled in a Web of Allegations

Established in 1995 under the leadership of renowned Islamic scholar A.Z.M. Shamsul Alam with the stated mission of serving humanity and promoting public welfare, Al-Arafah Islami Bank grew to become one of Bangladesh's leading Shariah-based commercial banks.

According to a 13-page memorandum submitted by shareholders to the Governor of Bangladesh Bank, the institution operated successfully until 2008, after which a dramatic change in control allegedly ushered in what the complainants describe as a "dark chapter" in the bank's history.

The memorandum alleges that, under political patronage, Chattogram-based KDS Group and associates of S. Alam Group gradually took control of the bank. Following the return of Sheikh Hasina to power in 2009, the complainants claim that former chairman Anwar Hossain, together with S. Alam and KDS Group, forced several long-serving and reputed directors to resign at gunpoint before installing a new board comprised of their own nominees.

The allegations have not been independently verified.

According to the memorandum, Bodiur Rahman, a relative of Ahmedul Haque—the younger brother of KDS Group Chairman Khalilur Rahman—was appointed chairman of the board and served in that role from 2009 to 2016. The shareholders allege that during his tenure, the two Chattogram-based industrial conglomerates, through Bodiur Rahman, abused power, promoted nepotism, committed financial irregularities and caused losses involving hundreds of crores of taka, placing the bank at significant risk.

The complainants further state that they had previously submitted similar allegations to Bangladesh Bank during Bodiur Rahman's tenure. The memorandum claims that Bodiur Rahman and a close-knit circle surrounding him were responsible for the bank's deterioration.

The document also notes that the Anti-Corruption Commission (ACC) had earlier filed cases against Bodiur Rahman over allegations of financial misconduct. However, the complainants argue that little progress was made due to his alleged close ties to KDS and S. Alam Group, both of which they describe as politically influential during the Awami League era.

The memorandum further alleges that, through Bodiur Rahman's mediation, the founder shares owned by entrepreneurs Abdul Hadi and Md. Ejahar Mia were fraudulently transferred to Khalilur Rahman using forged signatures and fake thumb impressions—acts that, if proven, would constitute criminal offences. According to the complainants, the current holders of those shares are Selim Rahman and Ahmedul Haque, respectively the son and brother of Khalilur Rahman.

They claim that through such methods, S. Alam Group and KDS Group eventually acquired 37.25 per cent of the bank's shares, comprising 23.75 per cent and 13.50 per cent respectively.

Allegations of Corporate Capture

The memorandum contends that although Al-Arafah Islami Bank remained professionally managed until 2008, a politically backed business group from Chattogram subsequently assumed control, placing trusted associates and relatives in key positions.

The appointment of Bodiur Rahman as chairman, according to the complainants, marked the beginning of widespread irregularities, abuse of authority and institutionalised nepotism.

Singapore Company and Money Laundering Allegations

One of the major allegations concerns Ariel Maritime Pte Ltd, a Singapore-based company allegedly established by Bodiur Rahman.

The memorandum claims that capital for the company was generated through money laundering from Bangladesh and refers to two ACC cases relating to the matter. The complainants have urged authorities to revive those cases and complete the investigations.

Selling His Own Ships, Financing Through His Own Bank?

Perhaps the most striking allegation involves the import of scrap vessels through companies allegedly linked to Bodiur Rahman and their subsequent sale to clients who were then granted investment facilities by Al-Arafah Islami Bank itself.

The complainants allege that the then-chairman used his influence to facilitate these transactions, effectively combining private commercial interests with institutional financial support.

Masters & Brothers: A Tk 59 Crore Risk Exposure

The memorandum claims that the company Masters & Brothers purchased a vessel under an agreement that was later violated. Despite the breach, pressure was allegedly exerted on bank officials to approve investment payments, exposing the bank to a potential loss of approximately Tk 59 crore.

According to the complainants, intervention by the then Managing Director ultimately prevented the loss from materialising.

WBIEMS Steel and Associates: Tk 109 Crore Classified as Bad and Loss

The shareholders further allege that vessels were sold to WBIEMS Steel and its affiliated companies in November 2008 under financing arrangements provided by the bank.

They claim that outstanding liabilities now stand at Tk 109 crore, while supporting collateral is valued at only Tk 16.80 crore, leading the facilities to be classified under the "bad and loss" category.

Tk 669 Crore Investment in the Chairman's Son-in-Law's Companies

Another major allegation concerns four companies owned by Shahabul Islam, identified in the memorandum as Bodiur Rahman's son-in-law.

The complainants allege that by 2014 these firms had received investment facilities totalling Tk 669.43 crore, despite collateral valued at only Tk 50.54 crore. They further claim that some of the underlying land documents lacked fundamental ownership verification.

The memorandum also alleges that amid internal criticism, ownership structures were altered on paper through changes in management in an effort to deflect scrutiny.

Tk 412 Crore Investment to a Close Associate

Dr. Bahauddin Mohammad Yusuf, described in the memorandum as a former director and close associate of Bodiur Rahman, allegedly received investment facilities worth Tk 412 crore through his company, Aymon Textiles and Hosiery.

According to the complainants, the company had already defaulted on another bank before obtaining the financing. They further allege that the investments have since become non-performing and that the businessman subsequently left the country.

Nephew's Rise and Tk 145 Crore in Risky Investments

The memorandum alleges that Sharif Chowdhury, identified as Bodiur Rahman's nephew, was rapidly promoted and placed in influential positions within the bank.

Through his role at the Khilkhet Branch, the complainants claim, approximately Tk 145 crore in risky investments were approved, including: Tk 60 crore to Ashiyan Land and Development; Tk 10 crore to Ashiyan Education; Tk 22 crore to Manzil Electrical; Tk 18 crore to Manzil Housing; Tk 33 crore to Mission Trade International; and Tk 2 crore to Ehsan Real Estate.

Complex FDR and Pay Order Irregularities at Banani Branch

The memorandum also alleges irregularities involving fixed deposits and pay orders.

According to the complainants, Tk 50 lakh received from Aymon Textiles was not recorded as an investment but was instead converted into an FDR, which was later used to issue a pay order in favour of Bodiur Rahman's shipping enterprise.

The incident was reportedly investigated by the Bangladesh Financial Intelligence Unit (BFIU), according to the memorandum.

Recruitment as a Family Affair?

The shareholders further allege that relatives, neighbours and people from the chairman's locality were recruited into the bank in large numbers during his tenure.

They claim that established recruitment policies and service rules were bypassed in favour of personal connections.

The "Expressway" of Promotions

The memorandum alleges widespread accelerated promotions between 2007 and 2024, with some officials receiving five promotions within three years and others six promotions within five years.

Among those mentioned are: Rezaur Rahman: five promotions in three years; Sharif Chowdhury: ten promotions in nineteen years; Akramul Haque: six promotions in five years; A.Z.M. Jahid Uddin: six promotions in seven years; and Md. Sarwar: five promotions in three years and four months.

The complainants have called for a comprehensive investigation into the criteria and motivations behind these extraordinary career advancements.

AIBL Capital Market Services: Negative Equity of Tk 768 Crore

Serious allegations have also been raised regarding AIBL Capital Market Services Limited, a subsidiary of the bank.

The memorandum cites a 2017 audit report claiming that the company's negative equity reached Tk 768 crore, with nearly half of the losses attributed to only thirty clients.

Rezaur Rahman: From Dismissal to Managing Director

According to the memorandum, Rezaur Rahman was dismissed from the Dhaka Stock Exchange over allegations of irregularities before joining Al-Arafah Islami Bank.

The complainants allege that within only three years, he received five promotions and eventually became Managing Director of the brokerage subsidiary.

They further claim that former Deputy Governor Ibrahim Khaled's investigation into the 2010-11 stock market scandal mentioned Rezaur Rahman's involvement.

Despite this, the memorandum alleges, he was reinstated rather than removed.

The shareholders further claim that Rezaur Rahman exercised actual control over the institution while others served merely as nominal chief executives. They also allege that he conducted share transactions through multiple BO accounts opened under pseudonyms.

Audit Reports Raise Questions Over Ten Officials

The memorandum refers to two separate audit reports that allegedly identified at least ten officials involved in personal trading, misuse of dishonoured cheque mechanisms and embezzlement of company funds.

According to the complainants, Rezaur Rahman alone earned Tk 5.24 crore through such methods, while Akramul Haque allegedly earned Tk 9.77 crore. Similar allegations have also been made against Chief Financial Officer Nadim.

Banking insiders quoted by the complainants argue that the matter extends beyond one institution and raises broader questions regarding corporate governance, regulatory oversight and public confidence in Bangladesh's banking sector.

Bodiur Rahman Rejects Allegations

Rejecting the accusations as politically motivated and conspiratorial, former Al-Arafah Islami Bank Chairman Bodiur Rahman told The Daily Inqilab that no ACC case had been filed during his tenure.

"The complaint was lodged by former chairman Anwar Hossain after I left office. I also learned that complaints were submitted to the then Prime Minister accusing me of being associated with Jamaat," he said.

He added that although the ACC filed a case in 2018, no charge sheet has yet been submitted.

"The ACC informed me in writing in 2020 that it found no evidence supporting the money laundering allegations. I have also provided evidence regarding the other accusations," Bodiur Rahman said.

Questioning the timing of the allegations, he added, "I am no longer on the board. I resigned in 2023. Why are these allegations being raised now?"

Bangladesh Bank Promises Review

Bangladesh Bank Executive Director and spokesperson Arif Hossain Khan said that the central bank would examine the shareholders' allegations and take action if evidence supporting the claims is found.

The allegations remain unproven, and no judicial findings have yet established the claims contained in the memorandum. The responses of all other individuals named in the allegations could not immediately be obtained.