BSEC launches probe after six ex-sponsor directors raise allegations against chairman

The Bangladesh Securities and Exchange Commission (BSEC) has launched an investigation into Islami Insurance Bangladesh Limited following allegations by six former sponsor directors against the company's current Chairman, Mohammad Sayeed Khokon, that he has been illegally running the company from an undisclosed location while retaining full financial and administrative authority.

A four-member investigation committee consists of Additional Director Md Faruque Hossain, who will serve as the senior member and lead the committee; Assistant Director Md Mehedi Hasan Rony; Assistant Director Mohammed Minhaz Bin Salim; and Manager of the Dhaka Stock Exchange (DSE) Md Gias Uddin. The committee is tasked with gathering evidence, reviewing relevant documents, and submitting a detailed investigation report.

The share price of the company closed at Tk36.90 on the Dhaka stock exchange on Thursday (20 November).

According to the complainants, since Sayeed Khokon assumed the chairmanship in 2012, autocratic practices have started in the company. Without any legitimate reason, the six former sponsor directors were removed from the board. In their place, the chairman appointed his wife, two daughters, sister-in-law, and two of his own companies as directors. 

Currently, the number of family-affiliated directors stands at ten, collectively controlling approximately 30.35% of the company's paid-up capital, according to the former directors. This family-centric shareholding and management structure constitutes a clear violation of the Companies Act, Insurance Act, and Securities laws, they argue.

The allegations further state that even after recent political changes, Sayeed Khokon, an Awami League leader, remains at an undisclosed location, from where he continues to manage company meetings, make decisions, and enjoy financial and other benefits. The former directors say this behaviour is entirely against corporate governance norms and basic principles of company management. They also allege that the company secretary and director, Nur Mohammad Mamun, has actively assisted the chairman in implementing these unilateral decisions, effectively supporting the irregularities.

Moreover, the former directors claim that the chairman appoints and removes the company's CEO, CFO, and company secretary at his discretion, and these decisions are recorded in the board meeting minutes. Any director who raises objections is removed from the board. The former directors say that the reasons for their removal remain unknown, and repeated requests for clarification have been ignored, which they consider entirely illegal.

According to the complainants, these irregularities at Islami Insurance pose a threat to the overall stability of the insurance sector. They have requested the BSEC to conduct an impartial investigation, take appropriate action if any legal violations are found, reinstate the wrongfully removed directors, and restructure the board. They emphasise that immediate action is necessary to restore corporate governance and protect shareholders' interests.

Sayeed Khokon's mobile number and WhatsApp are inactive, so it was not possible to contact him by TBS for comments.

Regarding the matter, the company's Acting Managing Director Md Moinul Ahsan Chowdury told this newspaper that listed insurance companies operate according to the Insurance Development and Regulatory Authority (IDRA) and the BSEC laws and guidelines, and the company is managed through its board accordingly. 

When asked whether all directors are present at board meetings, he replied that meetings are held as long as the quorum is complete. However, he avoided commenting on whether directors not attending meetings are receiving any undue benefits.

Despite the governance controversies, Islami Insurance's financial indicators remain largely stable. From January to September, the company posted a gross premium of Tk51.40 crore, slightly down from Tk52.47 crore a year earlier.

Its net premium rose to Tk38.50 crore from Tk36.85 crore, while net profit after tax stood at Tk8.01 crore, almost unchanged from Tk7.98 crore in the same period last year.

The company reported earnings per share (EPS) of Tk1.95 and a net asset value (NAV) per share of Tk22.57 at the end of September 2025.