The Appellate Division of the Supreme Court on Wednesday directed the government not to proceed with the appointment of a financial adviser for state-owned Nagad Ltd at a time when a legal dispute over the company鈥檚 management is pending.
Chamber judge Justice Md Rezaul Haque issued the directive after hearing an application filed by Md Shafayet Alam, a nominee director of Nagad, who challenged the Bangladesh Investment Development Authority鈥檚 recent move to bring new investors for the mobile financial service operator through a financial advisory firm.
The court said that no final decision should be made on the adviser appointment until the hearing of Shafayet鈥檚 appeal, which is scheduled for October 26, is held.
Shafayet had earlier filed a leave to appeal petition against a High Court verdict that upheld the Bangladesh Bank鈥檚 decision to dissolve Nagad鈥檚 board of directors and appoint an administrator on August 21, 2024.
The High Court had rejected his petition, ruling that Shafayet, as a minority shareholder, lacked the legal standing to challenge the decision. The Appellate Division also declined to stay the verdict at that time.
Despite the pending appeal, BIDA on August 31, 2025, issued a public notice inviting expressions of interest from firms interested in acting as exclusive sale-side merger and acquisition advisers for Nagad. The advisory firm would be responsible for assessing the company鈥檚 valuation, approaching potential investors and advising on deal structure and strategy.
Shafayet鈥檚 lawyers argued that the move was done without giving any prior hearing, in clear violation of sections 31(1) and 31(2) of the Payment and Settlement System Act, 2024.
In his petition, Shafayet said that such actions were premature and illegal at a time when the Supreme Court was still reviewing the legality of the administrator鈥檚 appointment.
He claimed that only a duly formed board of directors 鈥� not an administrator under legal challenge 鈥� could make decisions regarding investment or restructuring.
鈥楾he notice aims to invite new investors, which could significantly alter the company鈥檚 management structure,鈥� the petition stated. 鈥楾his undermines both the legal process and the interests of existing stakeholders.鈥�
Shafayet also claimed that he had invested over Tk 1,600 crore in Nagad and held a 51:49 revenue-sharing agreement with the Bangladesh Post Office, which was still in effect.
He warned that bringing new investors without resolving the legal dispute could damage his financial interests.
He further alleged that Nagad鈥檚 financial performance had declined under the administrator, with daily transactions dropping, which were previously Tk聽2,200 crore, and profits suffering due to 鈥榤ismanagement by someone lacking technical expertise鈥�.
On August 21, 2024, the central bank appointed administrator to Nagad.
He also claimed the BIDA initiative could amount to expropriation of shareholder rights, violating constitutional protections under articles 27, 31, 40, and 42.
Senior lawyers, including Muhammad Zamiruddin Sircar, Zainul Abedin, Muhammad Nawshad Zamir, Jamilur Rahman, Mustafizur Rahman Khan, Kayser Kamal and Rafiul Islam represented Shafayet, while additional attorney general Aneek R Haque appeared for the Bangladesh Bank.
