SBP rejects Jehangir Siddiqui & Co for buying Dubai Bank's shares in BankIslami

State Bank of Pakistan (SBP) has rejected request of Jehangir Siddiqui & Company Limited (JSCL) to review its decision to disallow Dubai Bank to sell out its shares to its sponsor shareholders. According to stock filing, the JSCL management said it approached the central bank in September to submit an application to the central bank with suggestions in order to getting additional shares in BankIslami.

But the central bank retained its decision and disallowed the management of BankIslami to sell its stakes of Dubai Bank to Jehangir Siddiqui Company in pursuant to Founding Shareholding Agreement under which sponsor shareholders are not allowed to increase its shareholding.

SBP notified earlier Dubai Bank on the directly JSCL approached the bank that it can't sell any shares in BankIslami to any its existing sponsor shareholder. Hence, the Dubai Bank showed its inability to sell its stakes to JSIL and other sponsor shareholders.

Earlier, a Consortium led by Ali Hussain of Jehanghir Siddiqui Company Ltd and Alkaram Group has offered Dubai Bank to purchase its 144.200 million in the BankIslami.

There were nine individuals who were disclosed to show their interest in the purchase of shares in AlKaram Group including Anis Yakoob, Noman Yakoob, Abid Umer, Afzal Umer, Sajid Haroon, Shafiq Sajid, Salik Shahid, Shahida Yakoob and Alkaram Financial Limited. BankIslami management decided to give first right of refusal to Jehangir Siddiqui Company Ltd and Randeree family to purchase the respective portion of share under the founding shareholders agreement between the shareholders of BankIslami.

Meanwhile, the management of BankIslami revealed names of its nine stakeholders having 12.8 percent or 129 million shares in overall shareholding of the bank on the direction of Security and Exchange Commission of Pakistan (SECP). The management had given a detail account of the shareholders names including Abid Umer, Anis Yaqoob, Afzal Umer, Noman Yaqoob, Haroon, Salik Sajid, Shafiq Shahida and Amni Industries.

The shareholding of these stakeholders varies from 0.7 percent to 1.86 percent but seven out of nine shareholders were the same who before part of the consortium of Ali Hussain of JSCL.

The management of BankIslami has been witnessing a difficult times as it has to convert assets and operations of KASB Bank into Sharia compliant whereas it has been facing allegations and suspicions from different authorities and media.

Besides, the bank's shareholding transaction from one investors group to another have not succeeded despite of availability of option as central bank raised concerns and objections. Sajid Sajid,