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Tuesday, 26 February 2008

Buying stake in Oriental Bank

Staff Correspondent

The government has cleared all the barriers for owning the Oriental Bank stake by the Switzerland-based ICB Financial Group Holding.

A finance ministry order issued on Sunday said the government in consultation with the Bangladesh Bank exempted the Oriental Bank from the regulation which stipulates that a company or a person or a family can not own more than 10 per cent shares of any private bank.

After winning the bid, the ICB Group is set to finalise the buying of 50.1 per cent shares of the Oriental Bank with Tk 350.67 crore through signing a sale and purchase agreement with the Bangladesh Bank on February 28.

'The central bank will handover the management of the problem bank to the new owner on a schedule agreed by both the parties,' said a central bank official. The fund received from the shares sale will be used as a fresh capital, he said.

After the handover, the new management will run the bank according the Bangladesh Bank scheme, he added. The central bank in June, 2006 took over the beleaguered bank, thrown into crisis, by fraud and mismanagement. The government declared moratorium on the operation of the problem bank, limiting withdrawal to Tk 10,000 per month.

The central bank in August last year announced the restructuring scheme to protect the interest of the depositors. The Bangladesh Bank decided to sell Tk 400 crore shares of the bank through open tender to sponsor shareholders and Tk 300 crore to general shareholders.

The depositors were offered a chunk of the general shares proportionate to their deposits, according to the scheme. The bank has about Tk 1400 crore deposit liabilities .

The depositors with Tk 1 crore and over will get shares of 25 per cent of their deposits, Tk 50 lakh to Tk 1 crore shares of 20 per cent of their deposits, Tk 10 lakh to below Tk 50 lakh shares of 10 per cent and depositors with less than Tk 10 lakh will get shares of 10 per cent, but it is optional.

The central bank forfeited Tk 44 crore shares of the bank's two directors Obaidul Karim and Abul Khair Litu, and the shares would be offloaded in the future, said a high central bank official.

The two were involved in misappropriating over Tk 594 crore from the private bank, throwing it on edge of collapse, a central bank investigation earlier revealed.

The Orion Group chairman Obaidul Karim and former managing director Koyes Sami were among the persons sued by the Anti-corruption Commission for the bank scam.

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