Court orders freeze of Tk 548 crore and 58.88 crore shares of S Alam Edible Oil due to loan default issue
**Court Freezes Assets in Massive Loan Default Case Involving Islami Bank's Khatunganj Branch**
A significant development in the financial sector has unfolded in Chattogram, as Judge Md Helal Uddin of Artha Rin Adalat No 1 issued an order on July 23, 2023, freezing assets in connection with a loan default case involving Islami Bank's Khatunganj branch. The case centres around S Alam Super Edible Oil Ltd, a concern of S Alam Group, and allegations of defaulting on a loan amounting to Tk13,317 crore (approximately USD 1.2 billion).
The court's order has affected two major assets. Firstly, a bank deposit of Tk548.39 crore held by Top Ten Trading House in the account of Islami Bank's Khatunganj Corporate Branch. Secondly, approximately 58.88 crore shares owned by S Alam Super Edible Oil Ltd, including all physical assets (land, structures, machinery, and raw materials) located in Gondamara and Alokdia mouzas.
The court's order explicitly prohibits the transfer, sale, or any transaction involving the frozen bank deposits and shares until further notice. This measure is intended to prevent the dissipation of assets that could be used to recover the defaulted loan. The restrictions are directly tied to the ongoing legal proceedings and are enforceable until the court issues a further order.
Furthermore, the court has summoned 14 accused individuals to explain within 10 days why they should not be held liable in this case. The petition was filed by Islami Bank Bangladesh PLC's Khatunganj branch, naming both the company and these individuals as defendants.
The case is part of a broader pattern of large-scale lending to S Alam Group entities from multiple Islami Bank branches, with the Khatunganj branch alone reportedly disbursing Tk23,295 crore in loans to various group companies. There are allegations that some of these loans were obtained even before the group formally acquired ownership of the bank, with the involvement of certain bank officials.
This case reflects concerns over systemic risks in Bangladesh’s banking sector, particularly regarding large, concentrated exposures to connected corporate groups. The scale of the alleged default and the rapid court action to freeze assets underscore the seriousness with which authorities are treating the matter.
| Aspect | Details | |-------------------------|------------------------------------------------------------------------| | Loan Amount in Default | Tk13,317 crore | | Frozen Bank Deposit | Tk548.39 crore (Top Ten Trading House, Islami Bank Khatunganj branch) | | Frozen Shares/Assets | 58.88 crore shares and all physical assets in Gondamara & Alokdia | | Court Order Date | July 23, 2023 | | Legal Status | 14 accused summoned to explain liability within 10 days | | Restrictions | No transfer, sale, or transaction of frozen deposits/shares allowed |
The outcome of the accused parties' explanations and subsequent legal proceedings will determine whether the asset freeze continues and what further actions, including potential recovery or criminal liability, may follow. The court case remains active, with the court maintaining strict control over key assets while the accused parties are compelled to justify their positions.
The asset freezing order by Judge Md Helal Uddin includes a bank deposit of Tk548.39 crore held by Top Ten Trading House in the account of Islami Bank's Khatunganj Corporate Branch, as well as approximately 58.88 crore shares owned by S Alam Super Edible Oil Ltd, which encompasses land, structures, machinery, and raw materials located in Gondamara and Alokdia mouzas.
The legal case centered around S Alam Super Edible Oil Ltd, a concern of S Alam Group, and allegations of defaulting on a loan amounting to Tk13,317 crore (approximately USD 1.2 billion) from Islami Bank's Khatunganj branch.
