Progressive Life downgraded to Z category; 5 independent directors nominated

The Bangladesh Securities and Exchange Commission has downgraded Progressive Life Insurance Company to the "Z" category from the "A" category for its failure to hold annual general meetings (AGMs) and declare dividends for two consecutive years.

The company's shares will be traded under the "Z" category from Thursday, according to the securities regulator's directive.

On Wednesday, the commission also nominated five Independent directors for the company's board. They were – Brigadier General Md Zakir Hossain, ex-chairman of the Bangladesh Textile Mills Corporation; Dr Mohammed Forashuddin, ex-governor of the Bangladesh Bank; Dr Md Jamil Sharif, associate professor of Dhaka University; Dr Tazrina Farah, associate professor of Dhaka University; and M Shoeb Chowdhury, chairman of The Asian Age.

The company's board of directors will be reconstituted within 45 working days from the first day of its placement in the "Z" category. It will be reconstituted by the eligible shareholders as per the relevant article of the company's memorandum.

The company will hold its AGM within six months after the closing of the financial year, subject to the limitations and compliance in other regulatory frameworks.

In September last year, the stock market regulator formed a three-member committee to look into the financial details of Progressive Life Insurance Company as customers' complaints regarding the non-settlement of insurance claims by it had been piling up.

The inquiry committee reported that the preparation and disclosures of financial statements of the company did not reflect its actual condition. They also did not comply with the different provisions of accounting standards, indicating that the company and its directors seem to have violated the related securities laws.

The inquiry committee identified huge irregularities in Progressive Life's acquisition of fixed and other assets, which were reflected in the financial statements inaccurately and disseminated its net asset value that have been misleading the investors.

Such types of non-compliances have led to detrimental outcomes, such as compromised transparency, compromised integrity of decision-making processes, erosion of trust among stakeholders, and potential financial losses for the company.

The Insurance Development and Regulatory Authority officials said earlier thousands of insurance policies of the company had matured but the clients did not get any money against their claims.

In its 2019 annual report, a statutory auditor informed the users of the company about some non-transparency in the firm's premium income, buying disputed properties, negative cash flow, and huge unpaid claims.

Since 2020, the company has not been calling any general meetings of its shareholders, and over time, its financials have been on a declining trend.

Progressive Life shares closed at Tk92.90 on the Dhaka Stock Exchange on Wednesday.