Anti-Corruption Commission chairman Ghulam Rahman said on Thursday night that the amount, which was laundered during the 2001-2006 tenure of Bangladesh Nationalist Party-led four-party alliance government, was returned under a deal with Singapore authorities.
"The amount was brought back to an ACC account with the (state-owned) Sonali Bank's Ramna Corporate Branch," Rahman said.
The statutory anti-graft body chief said this was the first time Bangladesh could get the laundered money back. separately, a process was underway to bring back $936,000, which too were laundered by Koko.
The development came five months after a Dhaka court handed down a six-year jail term to Koko after trial in absentia for siphoning off over Taka 20 crore (Rs 13.6 crore) abroad. The court at that time had declared him a "fugitive" for his failure to appear before it to face the trial.
During the past military-backed interim regime in 2008, the ACC had disclosed that Koko had foreign currencies worth around Taka 11.43 crore (Rs.7.76 crore) deposited in a Singapore bank but he concealed this information in his wealth statement submitted to the anti-graft watchdog.
Koko, now living in Bangkok, was arrested on September 2007 on graft charges under a massive anti-graft campaign during the army-backed interim regime and was paroled for treatment abroad in July 2008.
According to the chargesheet, Koko had underhand dealings with China Harbour Engineering Company Ltd and German telecom giant Siemens for setting up New Mooring Container Terminal in southeastern Bangladeshi port city of Chittagong for supplying and installing equipment for the state-owned Teletalk mobile phone operator.
Singaporean authorities in December 2008 froze assets worth $1.6 million associated with a company Koko established in 2004.
Koko's elder brother and BNP's Senior Vice President Tarique Rahman also faces a number of graft and criminal charges, including murder cases, and is being tried in absentia.
The ACC announcement came amid BNP's allegations that Zia's sons were being victimised for political vengeance, ahead of the next year's general elections.
The World Bank recently released a publication mentioning the alleged embezzlement of several million dollars by Koko as "an example of stealing national assets."
Image: Bangladesh's former premier Khaleda Zia's younger son Arafat Rahman 'Koko'