The auditor has found irregularities of crores of Taka in Sonar Bangla Insurance led by Sheikh Kabir Hossain listed on the stock market. Besides, the insurance company has cases of non-compliance with Bangladesh Securities and Commission (BSEC) directives, violation of labor laws and non-compliance with Insurance Development and Regulatory Authority (IDRA) directives.
Sonar Bangla Insurance Company received bonus shares worth Tk. 1 crore 89 lakh during 2016-2018 from subsidiary Sonar Bangla Capital Management. The bonus shares are treated as investment and income by the insurance company. Through this, on December 31, 2023, assets and equity of Tk. 1 crore 89 crore have been shown more.
The auditor said that the non-controlling interest in the insurance company as on December 31, 2023 (which the subsidiary does not own) is Tk 11 crore 45 lakh. But the company authorities have shown 9.6 million taka as financials. In this case, the management of the insurance company could not give any explanation about the understatement of Tk. 1 crore 85 lakh.
This insurance company has violated the BSEC guidelines on dividend distribution. As per BSEC guidelines, undistributed dividends are to be kept as separate banks. But as this separate company has a shortfall of Tk. 50 lakh in undistributed dividend.
Sonar Bangla Insurance Authority is not complying with labor law. According to the Labor Act, 2006, 5 percent of the net profit has to be set up as Workers’ Profit Participation Fund (WPPF). But Sonar Bangla Insurance Authority does not do that.
Meanwhile, according to IDRA SRO, Sonar Bangla Insurance can invest 20% of its assets in subsidiaries. But the insurance company authority has invested 29.28%.
According to the auditor, as per the Insurance Companies Act 2010, the founders/directors should have 60% shareholding in non-life insurance companies. But the share holding rate of Sonar Bangla Insurance is 39.54%.
Note that the paid up capital of Sonar Bangla Insurance which was listed in the stock market in 2006 is Tk. 42 crore 4 lakh. The company’s share price stood at Tk. 22.90 on Wednesday (October 16).
The auditor gave this information in the company’s 2023 financial account audit.
