A manager of Sadharan Bima Corporation (SBC) embezzled Tk 26.15 crore over a decade by keeping premiums in a bank account set up using fake documents of a board meeting of the state-run insurer, according to an audit report.

The audit of the Comptroller and Auditor General of Bangladesh (CAG) found that Abul Kashem opened the account with the Chawk Bazar branch of Exim Bank Ltd in the capital's Imamganj when he was the manager of the New Market branch of SBC in 2009-10.

In order to do so, he forged the decision of the 492nd meeting of the insurance company, used the name and designation of deputy general manager TM Jahid, and made Rafiqul Islam, who was not an employee of SBC at all, to impersonate as a deputy general manager.

The current account named "Sadharan Bima Corporation BR9" was operated jointly by Kashem and Islam.

Accordingly, Tk 27.78 crore was deposited in the account from 2010 to 2020 and these were the premiums paid by the Bangladesh Power Development Board, the Bangladesh Council of Scientific and Industrial Research, and the Bangladesh University of Engineering and Technology against marine insurance.

Tk 26.15 crore was withdrawn on various occasions from the account while the rest of the amount was kept there, according to the audit report.

Although the account was opened using the decision of the 492nd meeting of the board, the auditors did not find any evidence in favour of the account.

And the fraudulent activities and fund embezzlement became clear during the corporation's initial probe on October 7, 2020, and following assessment of account statements of the bank, it said.

SBC told the auditors that it came to know about the opening bank account and forging of signatures by one Rafiqul Islam and the fund embezzlement by Kashem on October 6 following a letter of an insurance official. A probe team led by a DGM was formed immediately.  

Kashem was temporarily suspended following a decision of the 620th board meeting of the corporation as the allegation regarding the irregularities was found to be true in the preliminary investigation.

The Anti-Corruption Commission (ACC) has filed a case against him. At one point, he was sent to jail. Later, Kashem came out of the jail on bail, said an official of SBC.

Kashem or his lawyer could not be contacted.

Mohammad Sirajul Hoque, a deputy director of the ACC, said the charge sheet of the case has been given and the trial now continues.

The fund embezzlement was one of the 13 counts of financial irregularities, involving Tk 209.94 crore, the office of the CAG found while carrying out audits into the insurer in 2018 and 2019.

SBC, the only state-owned non-life insurance and reinsurance export credit guarantee service provider in Bangladesh, runs its operation through eight zonal offices and 77 branches.

OTHER IRREGULARITIES

The corporation suffered a financial loss of Tk 5.50 crore for awarding two increments to the officers holding diploma degree in violation of the directives of the National Pay Scale 2015, the audit report said.

The CAG office recommended recovering the money from the officials concerned. 

It lost Tk 8.86 crore as it provided subsidies on lunch to the officials who were not eligible.

In another incidence, the corporation witnessed a financial loss of Tk 9.60 crore in 2018 and 2019 due to the non-collection of arrears in the form of floor rents at the head office as well as the zonal office in Chittagong.

Similarly, the insurer faced a financial loss of Tk 115.69 crore in 2019 as the head office did not recover dues from foreign reinsurers.

In its response, SBC said steps have been taken to recover the dues, according to the audit report.

In 2018 and 2019, the state insurer suffered a loss of Tk 8.31 crore due to the violation of contract terms and settling of fire reinsurance claims without surveyor reports.

It lost Tk 12.26 crore in the same two years as it settled claims against fire reinsurances breaching terms of the contract.

Similarly, the head office and the Dhaka zone saw a financial loss of Tk 8.60 crore due to the non-collection of advances paid to various sectors.

Tk 12.38 crore was lost for providing incentive bonuses to its officials without the approval of the Financial Institutions Division, the report said.

It recommended realising the money from the concerned officers or employees.

Shahimul Islam Babul, deputy general manager at the audit and compliance department at SBC, declined to comment on the audit report since audit objections and settlements are a regular process.