Investment interest in Nagad grows amid ownership dispute

Fresh investment interest has emerged in Nagad, one of the country’s leading mobile financial service (MFS) providers, even as unresolved disputes over its legal ownership and management structure continue to cloud its future.

Multiple local and foreign groups are reportedly exploring potential stakes in the platform following earlier signals from Bangladesh Bank (BB) that Nagad could be transitioned to private ownership. 

However, with no formal valuation completed and key legal questions still unsettled, uncertainty surrounds any potential transfer process.

According to sources, Dhaka-14 Member of Parliament Barrister Mir Ahmad Bin Quasem Arman has expressed interest, on behalf of a foreign investor group, in investing in Nagad. Abul Khair Group and Banglalink are also being discussed as potential interested parties.

Last August, BB Governor Dr Ahsan H Mansur announced at an event that Nagad would be handed over to the private sector. 

He said the move followed consultations with senior officials of the interim government and expressed hope that the process could be completed within three to four months. However, no transaction has since been finalised.

Sources at the central bank and Nagad said that over the past year, both local and foreign parties have submitted proposals seeking ownership stakes. At the same time, the interim government and the governor reportedly approached various groups to gauge interest. None of the proposals has progressed to completion.

Importantly, Nagad’s market valuation has yet to be determined through any independent assessment. The banking regulator has, however, conducted a forensic audit of Nagad’s asset quality through international audit firm KPMG.

Barrister Arman told the Daily Sun that his involvement is limited to coordinating with foreign investors interested in the country.

“A foreign group has contacted me and expressed interest in investing in Bangladesh. I am working as a coordinator with them,” he said.

He added that the group is considering investments in multiple sectors and has been advised to explore opportunities in Nagad. A letter expressing interest has been submitted to BB.

When asked about the potential investment size, he said no specific amount had been determined.

He also clarified that he is not personally investing in Nagad and that the matter has no connection to his affidavit disclosures. “I am only providing foreign investors with information about potential sectors. I have no personal involvement,” he said.

A senior Nagad official confirmed that a delegation from Abul Khair Group had visited the company’s office, though the conglomerate has not issued any formal comment.

Banglalink has recently applied for a digital bank licence from BB, raising questions about whether it would directly invest in Nagad. Insiders say no clear decision is expected until the digital banking licence process is finalised.

BB confirmed it received one or two letters several months ago expressing interest in investing in Nagad. However, these were not from political or local business groups.

Central bank spokesperson Arief Hossain Khan told the Daily Sun that Nagad’s legal ownership must be determined before any transfer can proceed.

“Only the legitimate owner can initiate and complete a transfer process. Bangladesh Bank would act as a regulator, not as an owner,” he said.

He added that legal authority to invite tenders must also be clarified. “Only the property owner can initiate a sale. Several legal and administrative steps must be completed before moving to a tender process. The central bank will not take any proactive decision without ensuring the consent of the legitimate owners and a proper legal basis.”

He further noted that although the Postal Department provides the service, questions remain over the ownership of Nagad Limited, the company entrusted with operating it.

Former owners are no longer in their previous positions, adding complexity to any transfer.

Sources at BB said unresolved disputes with former owners could expose any future investment to legal challenges. As an alternative, the government may need to confiscate shares through legal means before initiating a fresh transfer process. 

The governor is reportedly working toward resolving that issue.

A Nagad official cautioned that the governor cannot unilaterally decide to sell the company. “Matters under court consideration cannot be decided administratively. Ownership complexities involve three parties, the former managing director, the Postal Department and Bangladesh Bank as regulator. Without consensus, the issue cannot be resolved,” the official said.

Nagad began operations on 26 March 2019, and was presented as a service of the Bangladesh Postal Department. 

However, effective ownership was held by Third Wave Technologies, reportedly linked to business figures associated with the then-ruling Awami League.

Allegations later surfaced that Nagad operated without a full licence from BB and did not fully comply with certain MFS regulations.

Following the fall of the Sheikh Hasina government on 5 August 2024, BB dissolved Nagad’s board and appointed an administrator. Director Muhammad Badiuzzaman Dider was initially appointed, later replaced by Md Motasem Billah, who currently serves as administrator.

A special audit uncovered allegations of embezzlement involving fake distributors and agents, as well as the creation of excess e-money. 

According to BB and the Anti-Corruption Commission (ACC), approximately Tk2,356 crore could not be accounted for. An international forensic audit was conducted by KPMG.

Despite the uncertainty, Nagad remains a major player in the mobile financial services sector. Company sources said daily transactions range between Tk1,200 crore and Tk1,400 crore. In January alone, total transactions reached approximately Tk40,330 crore.

However, without a formal valuation and resolution of ownership disputes, any potential investment remains contingent on clearing legal and regulatory hurdles.