Home ›› 05 Aug 2022 ›› Front
Crystal Insurance Company, a listed firm, embezzled Tk 22.23 crore in 2020, revealed the draft report of an investigation by the Insurance Development and Regulatory Authority (IDRA).
The investigation found that Tk 16.15 crore of the embezzled money came from premiums while the rest involved cheque dishonour. Crystal Insurance was also found to have evaded Tk 5.7 crore in VAT.
The company could not come up with suitable explanations of the wrongdoings during the investigation. Investigators then recommended legal action against it.
Crystal Insurance Chief Financial Officer M Mahfuzur Rahman told The Business Post the IDRA had summoned them over the allegations and they provided necessary documents during the hearing.
“The evidence we presented shows we did nothing wrong. We think further investigation is needed,” he added.
Premium embezzlement
Crystal Insurance’s 2020 annual report said the deposit premium was Tk 16.15 crore. But this was not shown as income in the report.
The company could not present a proper explanation of this. The investigation team said in its report the money had been embezzled. The investigators said a similar situation was observed in the previous annual reports as well and this would continue in the future.
Cheque dishonour
The IDRA act says an insurer is required to issue insurance money receipts and cover notes to clients after depositing premiums in the bank.
But Crystal Insurance violated the law and was involved in Tk 6.08 crore cheque dishonour in 2020, the investigation report said. It also said the company’s explanation of why the Tk 6.08 crore cheque was bounced was not acceptable.
VAT evasion
The company was supposed to pay Tk 9.82 crore in VAT in 2020, but it paid Tk 4.12 crore.
The probe team asked for Tk 5.7 crore VAT exemption documents, but the insurer could not provide that.
Company’s financial status
The 2021 annual report said Crystal Insurance’s net premium income rose by 0.59 per cent to Tk 39.04 crore from Tk 38.81 crore in 2020.
Its assets rose by 10.34 per cent to Tk 160 crore at the end of 2021. In 2020, the assets of the company amounted to Tk 145 crore.
Capital market performance
The company has been paying cash dividends since 2020. Before that, it used to pay stock dividends regularly.
Its shares were traded between a minimum of Tk 33.8 and a maximum of Tk 69.2 each last year. In October, prices exceeded Tk 66.5 and then started decreasing gradually.
The current market capitalisation of Crystal Insurance is Tk 159 crore while the paid-up capital is Tk 40 crore.
