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Bangladeshi central bank bans former Farmers Bank directors from raising stakes

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Bangladeshi central bank bans former Farmers Bank directors from raising stakes

The Bangladesh Bank banned Farmers Bank Ltd.'s former chairman, Muhiuddin Khan Alamgir, and former audit committee chairman, Md Mahabubul Haque Chisty, from increasing their stakes in the lender, The Daily Star reported Dec. 12.

The central bank rejected requests from the pair to increase their stakes in Farmers Bank. It had earlier ordered them to resign their positions due to their alleged involvement in fraudulent financial schemes.

Alamgir owns a 5.85% stake in Farmers Bank while Chisty holds 4.98%. They were looking to buy an additional 10 million shares and 5 million shares, respectively. The face value of each share is 10 taka, the news outlet noted, citing a Farmers Bank's letter sent to the central bank.

Two other shareholders, Nayeem Chowdhury and Abu Alam, agreed to sell 5 million of their shares to Alamgir. Chowdhury also agreed to sell a further 5 million of his shares to Chisty.

In a special meeting in November, the board of Farmers Bank approved Alamgir and Chisty's requests to raise their stakes, but Bangladesh Bank revoked the decision Dec. 4. This was because the move would further hurt depositors' confidence in Farmers Bank, a central bank official said.

Meanwhile, Farmers Bank obtained approval from the Bangladesh Securities and Exchange Commission to raise 5 billion taka by issuing nonconvertible subordinated bonds.

As of Dec. 11, US$1 was equivalent to 82.48 Bangladeshi taka.