According to the Bank Companies Act, the position of a director is supposed to automatically become vacant if he is absent from three consecutive board meetings or for more than three months. But there is a clear violation of that law at Madhumoti Bank. Three directors of the bank have remained absent and participating board meetings from abroad for more than a year and a half. As a result, questions have been raised about the role of the regulatory body Bangladesh Bank in the bank's corporate governance issues.
The Madhumoti Bank incident is similar to the incident of Muhammad bin Tughlaq, the second Sultan of the Tughlaq dynasty of Delhi. Although he was knowledgeable in many areas, his governance was widely criticized. His eccentricity, extreme events, injustice and coercion have been described by the historian Ibn Battuta as the Tughlaq incident.
It is learned that Sheikh Fazle Noor Taposh, Sheikh Salauddin Jewel and Syed Rezaur Rahman, members of the board of directors of Madhumoti Bank, have not attended any board meeting in the last 17 months. However, although their directorships were supposed to be cancelled according to the Bank Companies Act, it has not yet been implemented.
Of these three, Sheikh Fazle Noor Taposh is a former mayor of Dhaka South City Corporation and a close relative of former Prime Minister Sheikh Hasina. The other director, Sheikh Salauddin Jewel, is a former member of parliament and Sheikh Hasina's cousin. Syed Rezaur Rahman is also known to be close to the same political circle.
Multiple cases and investigations are ongoing against these three directors, who left the country on August 3, 2024. The International Crimes Tribunal has taken cognizance of the charges of crimes against humanity against Sheikh Fazle Noor Taposh. The International Crimes Tribunal-1 accepted the formal charges on January 18 for the incidents that took place in Dhanmondi and Mohammadpur areas during the July uprising.
On the other hand, the Criminal Investigation Department (CID) of the police has frozen 123 bank accounts on charges of money laundering in the name of individuals and organizations related to Sheikh Salahuddin Jewel. These accounts have deposits of about 48.47 crore taka. In addition, savings certificates and three BO accounts have also been seized.
Several officials of the bank, speaking on condition of anonymity, said that Chairman Humayun Kabir has been regularly approving the leave of these three directors. In many cases, leave applications have been submitted via email or WhatsApp, but sometimes the leave has been extended without any application.
“The law is being clearly violated. Despite being abroad for a long time, no replacement director has been appointed,” said an official.
Bangladesh Bank officials have admitted that many directors have remained absent for long periods after the political changes, as the existing law does not specify the period of leave for directors. This is disrupting bank operations and putting the interests of depositors at risk.
In this context, Bangladesh Bank has prepared a draft of the Banking Companies (Amendment) Ordinance, 2025. According to the draft, no director can be absent from the board meeting more than once a year and for more than three consecutive months. If this period is exceeded, the directorship will automatically be terminated.
The draft law also proposes to impose limits on share ownership by individuals, families and institutions. According to the proposal, no individual or institution will be able to hold two percent or more shares in more than one bank at a time. Bangladesh Bank officials said that in the past, several large business groups have weakened the sector by taking control of several banks together. Citing the S Alam Group as an example, they said that thousands of crores of taka have been embezzled due to excessive influence.
However, the Association of Bankers, Bangladesh (ABB) has opposed the proposal. According to the representatives of the organization, general shareholders do not have a direct influence on the policymaking of the bank. Therefore, imposing a separate limit on share ownership is unnecessary.
Bangladesh Bank spokesperson and executive director Md. Arif Hossain Khan said, “If a bank director is absent from three consecutive board meetings or is found guilty in any case, his directorship will be revoked. On moral grounds, if someone is involved in crimes against humanity, he should voluntarily step down.”
In this regard, Managing Director of Madhumoti Bank Md. Shafiul Azam told media, 'Section 108 of the Companies Act states that if the board approves, the director's post can be retained even if he is absent. Our board has approved their leave. We cannot take legal action unless the court finally punishes him. However, the matter will be brought up for discussion in the next board meeting.'
An international source told Daily Industry that the financial condition of the bank so frazil that the day-to-day affairs could be stopped any day due to liquidity crisis.
