Sonali Life Insurance board suspends CEO

Just 15 days past a regulatory audit being initiated against him, the chairperson of Sonali Life Insurance has informed that its board of directors had suspended its chief executive officer (CEO) yesterday over allegations of misappropriating funds.

In a meeting, the board also decided "to appoint and constitute an Investigation Committee" to provide a report on the misappropriations, said a letter sent to the Insurance Development and Regulatory Authority (IDRA) by the chairperson.

"The company's own investigation found the allegations to be true," Sonali Life Insurance Chairperson Mostafa Golam Quddus told The Daily Star.

The insurance watchdog had appointed audit firm Hoda Vasi Chowdhury & Co on December 31 last year to complete within 30 days investigations into 17 claims of irregularities at Sonali Life, including that over Quddus' appointment.

The allegations include the chairperson not meeting the prerequisite of owning a minimum of 2 percent of the company's shares and purchase of a Tk 1.7 crore luxury car for the chairperson alongside exorbitant expenses for its maintenance from 2021 to 2023.

Sonali Life also allegedly paid Tk 13.75 lakh in 2021 in the form of taxes owed by the Dragon Sweater and Spinning, a company having no connection to the insurer other than being owned by Quddus.

The audit will also look into the means and manner through which the Sonali Life directors purchased its shares to boost its paid-up capital in 2018.

The company has also shown inflated figures as its life funds, said an IDRA official on condition of anonymity.

The IDRA had also instructed Sonali Life to limit spending to settlement of insurance claims and clearing employee salaries and allowances.

Afterwards, Chairperson Quddus in a letter requested that the IDRA postpone the audit, claiming that the CEO "was absent" at the office.

However, in another letter, CEO Mir Rashed Bin Aman informed the IDRA that the board of directors had kept him locked out of his room since the start of this year.

Moreover, the board had denied him access to the company's software, for which he could not perform his duties, said the CEO.

On January 10, the IDRA sent a letter condemning the board, saying its actions were illegal and against corporate governance guidelines.

It also directed the board to let the CEO enter his office and extend all cooperation so that he could conduct his duties.

Yesterday the IDRA also requested Dhaka Metropolitan Police to ensure the CEO's security at his office, informing that some of the board members who were involved in financial irregularities were barring his access.

The board did not comply with the IDRA directive to extend cooperation so that the CEO could perform his duties and now the regulator will take steps as per the law, said Zahangir Alam, spokesperson of the IDRA.

Meanwhile, CEO Aman told The Daily Star that he had not received any official letter regarding his suspension as of yet and the allegations against him were all false.

"Why are they (the board) not helping the audit firm in investigating the irregularities and corruption allegations against the company," he questioned.