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Now BSEC wades into Delta Life Insurance-IDRA feud

  • Published at 12:27 am February 23rd, 2021
Delta Life Insurance IDRA logos

Dispatches an auditor to the insurer

Delta Life Insurance’s woes just got worse.

Now, the Bangladesh Securities and Exchange Commission (BSEC) has appointed a special auditor to investigate the listed insurer’s financial statements.

MABS & J Partners, formerly known as Saha Mazumder& Co., has been tasked with conducting an audit into the books of the insurance company to get a handle on the elusive company’s financial health.

“The IDRA chairman and Delta Life Insurance authorities have contacted us about the ongoing problems,” said Shibli Rubayet ul Islam, chairman of BSEC, at the post-event press briefing on the BSEC’s roadshow in Dubai earlier this month, held yesterday. 

All in all, the two sides seemed to have two different statements.

“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. 

Delta Life Insurance could not be reached for comment at the time of filing the report.

This comes after the Insurance Development Regulatory Authority (IDRA) on February 11 dispatched an administrator, Sultan-ul-AbedineMolla, to Delta Life as per section 95 of the Insurance Act 2010.

Four days earlier, Delta Life called a press conference and played out an audio clip that suggested the IDRA Chairman M. Mosharraf Hossain 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.

Then on February 17, Molla, a former member of IDRA, sent a letter to PallabBhowmic, the joint executive vice-president of Delta Life Insurance, terming the allegations against the IDRA chairman false and fabricated and asked the company to withdraw the complaint from the ACC. Dhaka Tribune has a copy of the letter.

“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 on Thursday.

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.  

Delta Life’s troubles all started on November 13 last year, when Hossain called Md. Abdul Awal, an executive of Delta Life, went to his house and demanded Tk 2 crore as a bribe for renewing the contract of its 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 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 20.3 per cent since then. Yesterday, they closed at Tk 69.9, down 1.3 per cent from the previous session.