Bangladesh News

The government is going to cancel today the process of Rupali Bank sale to Saudi Prince Bandar Bin Mohammed Bin Abdulrahman Al-Saud after deals and negotiations for two years.

A proposal to cancel the overall sale process will be placed at the Advisory Committee on Economic Affairs meeting today.

The meeting chaired by Finance Adviser Mirza Azizul Islam is also likely to decide the fate of the crisis-ridden state-owned bank.

The cancellation proposal carries detailed description of the selling process, which started in May 2005 when the government initially offered to sell 67 percent of the bank.

Several investors submitted expressions of interest with Prince Bandar winning the contest. In February 2007, the government approved the sale of a further 26 percent to the prince.

The Saudi prince won two separate bids to take over the government’s 93.26 percent shares of the bank with an offer of over $458 million, while the rest of the shares remain as public issues.

In December last year, Prince Bandar in a letter to General Moeen U Ahmed, chief of army staff, said he was willing to pay only $185 million instead of the $458 million he offered last year.

In his letter the prince also heavily attacked the conduct of the Privatisation Commission and the finance ministry during the sale process, which he said had “been riddled with discrepancies and insidious undercurrents.”

The Privatisation Commission served a legal notice on the Saudi prince in December 2007, asking him to deposit $458 million within December 26 as per its tender participation rules for taking over Rupali Bank.

But the prince did not reply to the commission.

The commission in a letter had earlier informed the chief adviser that after the two-week period of the notice the prince will be liable to forfeit $100,000 in security money paid to it.

The commission wasted over Tk 17 crore of public money violating privatisation regulations in the process of making the now uncertain deal of Rupali Bank sale to the prince.

The government had earlier decided to privatise Rupali Bank as part of the financial reforms and banking sector modernisation.

The commission had also invited bids from seven selected organisations listed through a scrutiny from among those interested, both from home and abroad.