Sonali Life ordered to cooperate with CEO

The insurance regulator today ordered Sonali Life Insurance to cooperate with its CEO Mir Rashed Bin Aman so that he can do his duties.

The Insurance Development and Regulatory Authority (IDRA) made the call after Aman in a letter to the IDRA said Sonali Life's board had not allowed him to enter the company's office since January 1.

He also said his room had been locked and he had been denied access to the company's software, which barred him from performing his duties since the first day of 2024.

Not allowing the CEO to perform his duties is illegal and against corporate governance guidelines, the IDRA said in today's letter to Sonali Life and instructed its board to allow the current CEO to enter the office.

On December 31 last year, the insurance watchdog appointed Hoda Vasi Chowdhury & Co, an audit firm, to investigate on Sonali Life's different financial irregularities, including the unusual appointment of Mostafa Golam Quddus as chairman.

In today's letter, instructions were also given not to spend on anything—without prior regulatory approval—other than settling insurance claims and clearing employee salaries and allowances.

However, just before Aman's letter, Sonali Life's chairman requested postponing the ongoing IDRA investigation, as Quddus claimed CEO Aman was absent in the office.

The IDRA alleged that Quddus became Sonali Life's chairman without any investment, whereas as per the regulations the chairman of a local insurer must hold a minimum of 2 percent shares of the company.

The investigation allegations include the means and manner through which directors of Sonali Life purchased shares in the company to boost its paid-up capital in 2018.

Similarly, the auditor was asked to find out why Sonali Life paid tax of Tk 13.75 lakh owed by Dragon Sweater and Spinning Ltd in 2021, despite the latter being a separate company owned by Quddus.

Hoda Vasi Chowdhury & Co will also look into the purchase of a luxury car valued at Tk 1.7 crore for the company's chairman as well as its huge expenses on maintenance from 2021 to 2023.

It was also found that there were discrepancies in the value of the company's life fund, said an IDRA official on condition of anonymity.

The auditor was asked to complete its investigation into a total of 17 issues related to Sonali Life within 30 days of being appointed, the official added.