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The reconstructed board of Fareast Islami Life Insurance is hell-bent on carrying out necessary reforms to regain customer trust and achieve regulatory compliance.
The newly appointed Chairman Md Rahmat Ullah of the beleaguered company said this while talking to The Business Post.
“We have already had two board meetings with the newly appointed independent directors, looked into internal matters and taken various steps,” he said.
“It is not time to reveal everything. We will definitely take necessary actions by removing all shortcomings gripping the company.”
The chairman maintained that committees are being formed in departments that didn’t have any; nomination and remuneration committee as well as audit committees have been made; many other key decisions will be taken at the next board meeting.
Earlier, the insurer did not comply with many rules and regulations of Insurance Development and Regulatory Authority (IDRA) and Bangladesh Securities and Exchange Commission (BSEC), according to sources.
With internal audit, the company is fixing its loopholes and inconsistencies.
IDRA on September 15 removed Fareast Chief Executive Officer Mohammad Hemayet Ullah for his involvement in mismanagement and financial irregularities and activities that went against the interests of policyholders.
Earlier, the BSEC on September 1 dissolved the board of directors of the insurance company and appointed 10 new independent directors to protect its investors, policyholders and capital.
Md Rahmat Ullah, dean, Faculty of Life Sciences, University of Development Alternative, was made chairman of the new board.
The insurance regulator asked Fareast to appoint its DMD and CFO Mohammad Alamgir Kabir, FCA, as the new additional chief executive officer till further notice.
On September 16, Alamgir Kabir took the charge of an additional CEO for the company.
Bangladesh Securities and Exchange Commission (BSEC) also decided to investigate allegations brought against some staff including an entrepreneurial director of the company.
BSEC officials said they found a series of irregularities and allegations against the insurance company for not settling claims.
The commission hopes that the newly formed board would recast the company’s top management within the next six months, bring back corporate cash and assets, and take legal action against those that committed financial crimes including money laundering over the past 10 years.
One independent Director Md Mofazzal Hossain told The Business Post they are taking various steps under the leadership of the current chairman.
“We joined the company as per the instructions of the BSEC. We are still learning about the company’s status. Right now, we are fixing its management,” said Mohamad Sanaullah, another independent director.
Asked about the issues that gripped the insurance company, new additional CEO Mohammad Alamgir Kabir declined to make any comment.
Fareast Islami Life Insurance in last three years
According to the financial reports of the insurer, Fareast FDR in 2018 stood at Tk 404 crore. In 2019, it decreased to Tk 342 crore, and in 2020, it went further down to Tk 297 crore.
Besides, in 2018, the company had a life fund of Tk 3,339 crore. In 2019, the fund stood at Tk 3,369 crore, and in 2020, the amount was Tk 3,387 crore.
In 2018, the total investment amount was Tk 2,512.86 crore. In 2019, it stood at Tk 2,613.89 crore, and by 2020 it came around Tk 2,645 crore.
In 2019, the company assets amounted to Tk 4,347.94 crore, and by 2020, it went up to Tk 4,327.36 crore.
Meanwhile, Fareast was listed on the Dhaka Stock Exchange in 2005. It belongs to “A” category and has a paid-up capital of Tk 75 crore.
The insurer has 615 offices including divisional and zonal service centres employing over 3 lakh across the country.
