Bangladesh tycoon files arbitration claim over ‘hundreds of millions’ lost

One of Bangladesh’s richest men has submitted an international arbitration claim arguing that Dhaka’s efforts to recover assets it alleges were illegally funnelled overseas have cost his family’s business “hundreds of millions” of dollars.

Lawyers for Mohammed Saiful Alam, founder and chair of Bangladeshi industrial conglomerate S Alam Group, and his family filed the request for arbitration on Monday to the World Bank’s International Centre for Settlement of Investment Disputes in Washington, according to documents seen by the Financial Times.

In the claim, the family argues that it has been the victim of a “targeted campaign of arbitrary asset freezing, confiscation and value destruction” by the interim government of Muhammad Yunus, who was installed after a popular uprising overthrew the regime of former prime minister Sheikh Hasina last year.

The case is a potential setback to the Yunus government’s efforts to claw back billions of dollars that it says were diverted out of the country under Sheikh Hasina’s 15-year rule. An economic white paper commissioned by the Bangladeshi government and published in December estimated that toll at about $234bn.

Ahsan Mansur, Bangladesh’s central bank governor who is leading the government’s asset recovery effort, accused the S Alam family of diverting about $12bn out of the country’s banking system. “Where is the money?” he said.

S Alam, which has interests in sectors including food, construction, garments and banking, has said there is “no truth” to Mansur’s allegations.

Lawyers working on behalf of the S Alam family in December warned the Yunus government that it would file the arbitration case if the sides could not resolve the dispute within six months.

In the claim, lawyers at Quinn Emanuel Urquhart & Sullivan alleged that the government had frozen bank accounts and seized assets belonging to the S Alam family, conducted “spurious” investigations into their business dealings and “co-ordinated an incendiary media campaign” targeting the family.

The claim said this had resulted in “very substantial damages, estimated in the hundreds of millions” of dollars. It did not specify how much the S Alam family was claiming as compensation.

In response to questions about S Alam’s submission for arbitration, Mansur told the FT: “We will give our response through the proper channel, whenever it reaches us.” Yunus’s office did not respond to a request for comment.

The arbitration claim was made under a 2004 bilateral investment treaty between Bangladesh and Singapore, where the S Alam family is based. Family members obtained Singapore citizenship between 2021 and 2023, having renounced Bangladeshi nationality in 2020, according to legal documents seen by the FT.

The S Alam family has argued previously that as Singaporean citizens, they should be protected by rights granted by Bangladesh’s 1980 law on foreign private investment.

Mansur, a former IMF official, has previously accused S Alam, Alam’s family and his associates of funnelling money out of the banking system through forced takeovers of banks with the help of Bangladesh’s powerful military intelligence agency.

He said S Alam and its associates used methods such as loans and inflated import invoices at six banks controlled by the company.

“We have discovered huge amounts of evidence to indicate how much resources they have diverted,” said Mansur. “So we are now dealing with his banks, which have a negative net worth . . . and the government has to bail them out.”

In the arbitration claim, the Alam family argued that the government has failed to produce evidence of its alleged wrongdoing.

Earlier this year, Mansur said he would consider financial settlements with tycoons accused of funnelling money out of the country.

Source: The Financial Times