Delta Life Insurance alleged that the IDRA chairman had solicited a bribe of Tk 50 lakh pertaining to renewing the contract of its CEO
The finance ministry has formed an inquiry committee to investigate the graft allegations against Insurance Development and Regulatory Authority Chairman M. Mosharraf Hossain.
The development comes after Delta Life Insurance alleged that the IDRA chairman had solicited a bribe of Tk 50 lakh pertaining to renewing the contract of its chief executive officer along with other regulatory approvals.
Delta Life Insurance had filed a complaint with the Anti-Corruption Commission against the IDRA chairman over the illegal gratification sought.
ABM Ruhul Azad, additional secretary to the Financial Institutions Division of the finance ministry, will lead the three-member inquiry committee formed last week.
The committee will investigate the veracity of the allegations against Hossain and the reasons behind the allegations, Azad told Dhaka Tribune.
The probe body has been asked to submit a report within 15 working days, he added.
In another development, Hossain is not part of the programme arranged to observe the National Insurance Day on March 1, according to the programme’s schedule.
Prime Minister Sheikh Hasina will attend the programme as chief guest virtually.
The finance ministry in collaboration with the IDRA, the Bangladesh Insurance Association and the Bangladesh Insurance Forum will organise the event.
The twin events give credence to Delta Life’s proclamation that the insurer was not treated fairly by the IDRA because of Hossain, himself a former employee of the 35-year-old insurer.
Earlier on February 11, the IDRA suspended the board of directors of Delta Life for four months and appointed Sultan-Ul-AbedineMolla, a former IRDA member, as an administrator to the company.
But Delta Life alleges that Molla is doing the bidding of Hossain.
The allegation came after the administrator on February 17 instructed Pollob Bhowmik, joint executive vice-president of Delta Life Insurance, to withdraw the complaint he had filed with the ACC against the IDRA chairman over bribery.
“This development confirms our apprehension that the administrator has been appointed for a collateral purpose, namely, to interfere with and frustrate an investigation on an allegation of corruption by procuring a withdrawal of the complaint through duress,” Zeyad Rahman, a board member of Delta Life told Dhaka Tribune last week.
The allegation is corroborated by multiple audio recordings and subsequent admission by the IDRA chairman that he did indeed seek illegal gratification, he said.
“We remain confident that our position will be vindicated by a fair and proper inquiry and investigation by the government and the ACC,” he added.
Subsequently, the High Court has instructed the ACC not to accept the letter submitted by Bhowmik seeking withdrawal of his corruption complaint against Hossain.
Meanwhile, following contradictory claims by the listed company and its primary regulator, the capital market regulator Bangladesh Securities and Exchange Commission (BSEC) has appointed MABS & J Partners, Chartered Accountants for a special audit into the company’s books.
“The IDRA chairman and Delta Life Insurance authorities have contacted us about the ongoing problems,” said Shibli Rubayet ul Islam, chairman of BSEC, at a press conference on Monday.
All in all, the two sides seemed to have two different statements, he said.
“Now our responsibility is to bring out the right picture. For this, we have appointed a special auditor. We informed the matter to the finance ministry,” he said at the event held at the BSEC’s headquarters in the capital’s Agargaon.
It all started on November 13 last year, when Hossain called Md. Abdul Awal, an executive of Delta Life, to his house and demanded Tk 2 crore as a bribe for renewing the contract of CEO, Adeeba Rahman, and approving the actuarial basis of the insurer for 2019.
But the Delta Life employee responded in the negative.
The IDRA chairman, who was previously a senior officer at Delta Life Insurance, then brought down the amount allegedly to Tk 1 crore and later to Tk 50 lakh.
After the meeting, Awal informed the matter to Delta Life top management, who directed him to initiate another conversation with the IDRA chairman and record it.
On November 14, Awal again met with Hossain at his residence and recorded the conversation, in which he demanded Tk 50 lakh.
If the amount is paid, Hossain would renew the CEO's contract, improve the actuarial basis and wave the fines. If not paid, he would get journalists to write against Delta Life and appoint an administrator.
A day later, after the Delta Life management did not respond to the call for the kickback, the IDRA chairman rejected the renewal of the CEO's contract.
“As we are loyal to the prime minister’s zero-tolerance policy, we did not follow the path to give illegal gratification to the IDRA chairman,” Chowdhury Qamrul Ahsan, executive director of Delta Life Insurance, said in the press conference on February 7 this year, where he played out the audio recording.
On November 15 last year, the IDRA fined Delta Life Tk 5 lakh for the insurer’s failure to submit the audited report for 2019, which, according to the company, was being delayed because one of the documents called the actuarial valuation report was not approved by the regulator on time.
Then on December 7, Delta Life Insurance filed a complaint with the Anti-Corruption Commission for illegal gratification sought by the IDRA chairman along with the audio clip and transcript.
“He [the IDRA chairman] is intimidating the company to impose a fine under different excuses. He is even threatening that he would suspend the board of directors and appoint an administrator,” Ahsan had said in the press conference.
Shares of Delta Life, which has been listed since 1995, have been on a descent since January 19: it dropped 21.1 per cent since then. Yesterday, they closed at Tk 69.3, down 0.6 per cent from the previous session.
Delta Life and Hossain could not be reached for comment.