The High Court has ordered the authorities concerned to freeze for three months S Alam Group’s 81.92 percent shares in Islami Bank Bangladesh PLC, held through 24 companies, on allegations that the shares were illegally consolidated and controlled by the group.

The court issued a rule questioning why the Bangladesh Bank's inaction in preventing the alleged concentration of the bank's shares through the 24 companies, in violation of Sections 14A and 14B of the Bank Company Act, 1991, should not be declared illegal.

It also questioned why necessary steps should not be taken to forfeit the shares under Section 14A (3) of the law.

The High Court bench of Justice KM Kamrul Kader and Justice Md Lutfor Rahman issued the rule and order on August 30 following a writ petition filed by Islamic Economic Research Bureau (IERB), a sponsor shareholder of Islami Bank Bangladesh PLC.

Petitioner’s lawyer Mohammad Shishir Manir told The Daily Star today that under the Bank Company Act, a single group or family cannot hold more than 10 percent of the shares of a bank.

However, the 24 companies allegedly linked to S Alam have been holding a combined 81.92 percent stake in Islami Bank as institutional shareholders, according to the petition.

The petitioner said the law empowers Bangladesh Bank to seize shares held in excess of the permissible limit.

As part of an interim order, the High Court directed that the 81.92 percent shares held by the 24 companies be frozen for three months, he said.

Shishir Manir appeared for the petitioner, assisted by Advocate Mohammad Saddam Hossen, during the hearing on the petition.