The High Court Division of Bangladesh Supreme Court has stayed a Bangladesh Bank (BB) order to close down the activities of AB Bank Foundation. The High Court has also issued a rule nisi on the central bank in this respect.

The HC has also st ayed the order of forfeiture of 6.12 percent shares in IFIC Bank Ltd held by the Foundation.

AB Bank filed a writ petition with the High Court Division on September 4, 2008 against an earlier BB order to close the activities of AB Bank Foundation within three months and forfeit 6.12 percent shares in IFIC Bankheld by the Foundation.

Earlier on July 13, the central bank confiscated 6.12 percent shares in IFIC Bank held by AB Bank Foundation, an arm of AB Bank Ltd.

The BB had found that AB Bank bought these shares through AB Bank Foundation in violation of the banking company laws.

The central bank ordered the cancellation and forfeiture of the shares with immediate effect and asked the AB Bank to stop activities of the AB Bank Foundation within three months.

The BB confiscated the shares following an investigation, which found that AB Bank violated the Banking Companies Act 1991 in pur-

chasing the IFIC Bank's shares in the name of its foundation.

Later, the BB served a show cause notice to the AB Bank, asking it to explain why its shares in IFIC Bank should not be confiscated.

The central bank on July 13 sent two letters to the managing directors of AB Bank and IFIC Bank in this regard.

As the AB Bank’s reply was not satisfactory, the BB confiscated the shares and. ordered to transfer those to the BB with immediate effect, the letter mentioned.

The letter also termed the AB Bank Foundation an illegal organisation as it was not formed as per the existing rules.