Special auditor to examine ‘irregularities’ of Fareast Insurance

Highlights 

• The company's fixed deposit decreased by 1,017.51 crore between 2016 and 2018
• Total investment was reduced by Tk237.84 crore from 2017 to 2018
• The company's life insurance policy revenue decreased by Tk63.21 crore in the first nine months of 2019
• The company failed to disclose its annual performance 
• Customers suffered due to the company's failure to resolve claims

The securities regulator will appoint a special auditor to examine three years of financial statements of the poorly-performing Fareast Islami Life Insurance Company Ltd – in the interest of investors. 

The Bangladesh Securities and Exchange Commission (BSEC) decided this recently after it found irregularities in the insurer's financial statements from 2016, 2017 and 2018. 

A Wahab and Co Chartered Accountants will audit the financial statements by the next two months for a payment of Tk4.90 lakh. 

There are allegations that the company does not meet the claims of its customers duly. 

As a result, customers suffer even after their policies mature.

Khadija Khatun, who works as an agent of the company in Savar, told The Business Standard Fareast Islami Life Insurance Company has not met the insurance claims of its customers whose policies matured in 2017.

"Through me, five of my relatives had opened policies which matured in 2017. But the company has not resolved any of the claims as of now," she said. 

As a result, the customers are being harassed to get money from the company against the insurance policies, she added.

Khadija said, "Due to the non-payment, as an agent, I am being harassed by customers."

Rumana Akter's insurance policy matured in 2018, but she did not get the money. 

"I have submitted all the documents to the company in this regard. But the company has been harassing me till now," she added.

There are many more insurance customers of Fareast Islamic Life Insurance Company who have been suffering in various ways for its failure to clear their dues.

This correspondent phoned Md Hemayet Ullah, chief executive officer of the company, for his comments on the allegations, but he did not answer. 

According to the financial report, in 2016, the company's fixed deposit was Tk1,431.10 crore, but it was reduced to Tk413.59 crore in 2018.

In 2018, the company's total investment was Tk2,512.86 crore, a decrease from Tk2,750.70 crore in 2017. 

During the January-September period of 2019, the company's revenue from life insurance policies decreased by Tk63.21 crore, from its total life insurance fund of Tk3,269.72 crore.

The company, which incorporated in Bangladesh on May 29, 2000, was listed on the country's stock exchanges in 2005. 

The closing share price of the company on Dhaka Stock Exchange was Tk46.40.

The company paid a 20% cash dividend to its shareholders for the last financial year ending on December 31, 2018.

Sponsors and directors jointly hold a 32.56% stake in the company, institutional investors 42.25%, foreign investors 1.42%, and general investors 23.77%.

Fareast Islami Securities Ltd and Fareast Islami Properties Ltd are the subsidiary companies of Fareast Islami Life Insurance.