BTRC’s curious U-turn on Summit Communications

The telecom regulator has walked back on its decision just two months ago to allow Summit Communications to transfer its shares without any fee, in a development that raises questions about the extent of benefits the company received during the 15 years of the previous Awami League government.

Muhammad Farid Khan, chairman of Summit Communications, is the younger brother of AL presidium member Faruk Khan, also a five-time member of parliament from the Gopalganj-1. Farid is also a close friend of Sajeeb Wazed Joy, the son and ICT affairs adviser of former prime minister Sheikh Hasina.

As per rules, when a company transfers shares, it has to furnish 5.5 percent of the selling price as a fee to the state coffer.

In April 2021, Kirtonkhola Tower Bangladesh had to pay Tk 5.7 crore to the Bangladesh Telecommunication Regulatory Commission (BTRC) for share transfer to new companies through issuing new shares.

However, for Summit Communications, which became the largest infrastructure company in the telecom and internet sector after debuting in 2009, the fee was waived on semantics.

In late March, Summit Communications sought the regulator’s approval to issue new shares valued at Tk 170.5 crore to companies based in Abu Dhabi and Mauritius and its current managing director.

A total of 14.20 crore new shares will be issued for Tk 12 each, according to the application.

A month later, it decided to send a letter to the posts and telecommunications ministry for a pre-approval of the transaction. The government approval came next month.

Then on June 12, the BTRC allowed the company to do the share transfer without any charges.

Before doing so, the telecom regulator sought the legal opinion of the law firm, which said that since Summit was merely issuing new shares, the 5.5 percent fee on the selling price was not applicable.

However, the BTRC’s legal and licensing division wanted to slap the charges from the onset as Summit was transferring and selling shares in the guise of issuing new shares, The Daily Star has learnt from officials involved with the proceedings.

It is because after issuing the shares, Farid’s holdings in the company came down from 95 percent to 25 percent as he transferred the shares to new entities and Summit also submitted the sales agreement with these companies.

Of the new shares, about 9.44 crore shares worth Tk 113.38 crore were issued to the UAE-based company Global Energies — enough to secure 49 percent stakes in Summit Communications.

One of the shareholders of Global Energies is Adeeba Aziz Khan, the middle daughterof Farid’s older brother Muhammad Aziz Khan, also the chairman of Summit Group.

She nominated Farid’s daughter Fadiah Khan and Sanadina Khan, the daughter of her uncle Jafer Ummeed Khan, as directors of Summit Communications, according to BTRC documents that cited the Global Energies Holdings’ board resolution.

“So, the charge is justified for Summit — we earlier charged Kirtonkhola Tower Bangladesh for the same process,” said a top official of the commission on the condition of anonymity to speak candidly on the issue.

Mohiuddin, who resigned as BTRC president on August 14, could not be reached for a comment despite repeated attempts.

In its response to The Daily Star, Summit Communications said it has already furnished Tk 10.24 crore to the regulator after the BTRC letter.

“On the surface, you would see Summit has become a giant providing quality services and operating under law and rules. It’s true,” said a top official of a company that operates in the telecommunication industry.

However, this move suggests that similar instances may have occurred in the past.

To address these potential gaps, an independent investigation should be launched to enable the regulator to recover any lost revenue on behalf of the state, he added.

Summit Communications maintains it has done nothing wrong.

The company along with its partners are deploying a private submarine cable by the first quarter of 2026, it said.

“And the investment needed to establish this project is approximately $40 million per member. Over the past five years, Bangladesh has faced economic challenges, including a shortage of dollars and a critical need for such funds.”

The partnership with Global Energies and Sequoia Infra Tech was “strategically developed to boost the company’s paid-up capital and infuse foreign currency — resources that local banks were unable to provide”.

“This collaboration is essential for completing the submarine cable project, which is of significant national importance and necessity,” it added.