Fareast Islami Life to sell assets to pay insurance claims

Fareast Islami Life Insurance Company Ltd – once a top premium earner among the country's life insurers – is going to sell three pieces of land to pay claims by policyholders, which have been due for several years.

The properties are valued at Tk123 crore, according to a stock exchange filing by the company.

The three pieces of land located in Rajshahi, Bogura, and Munshiganj are priced at Tk106 crore, Tk15.05 crore, and Tk2.28 crore respectively.

An official at the insurer said on condition of anonymity that the company has already paid Tk750 crore against insurance claims this year.

He said now it has yet to pay more than Tk1,000 crore claims to its policyholders.

The company wants to pay all matured claims gradually, he added.

The decision to sell properties has been approved by the Insurance Development and Regulatory Authority.

In September 2020, the Bangladesh Securities and Exchange Commission (BSEC) appointed A Wahab and Co Chartered Accountants for a special audit after it found irregularities in the insurer's financial statements.

The auditor unveiled a huge financial crime by Fareast Islami Life which involved embezzling of Tk2,100 crore in the last ten years by some of its previous directors and collaborating officials.

After that, the regulator restructured the life insurer's board by ousting all the existing directors and appointing ten professionals as independent directors afresh.

The new board had been assigned to set up an audit committee comprising independent directors as per corporate governance code 2018, take initiatives to reform the top management, and try to bring back its embezzled money.

Besides, the new board will take steps against those who committed financial crimes and embezzled money from the company in the last 10 years.

Currently, Sheikh Kabir Hossain, Md Ibraheem Hosein Khan, Sheikh Mamun Khaled, Md Rafiqul Islam, Lafifa Jamal, Mozammel Haque, Al-haj Md Helal Miah, Arif Khan, Mostafa Zamanul Bahar, Jahurul Islam Chowdhury, Mohammad Ali Nawaz, and Md Masum Mia are on the board of directors of the company. 

The company, which was incorporated in Bangladesh in 2000, got listed on the country's stock market in 2005.

The last closing share price of the company on the Dhaka Stock Exchange was Tk75.

For the last time, it paid a 20% cash dividend to its shareholders in the financial year ending on 31 December 2018.

Sponsors and directors jointly hold a 41.37%, institutions 23.10%, foreign investors 0.37%, and general investors 35.16% stake in the company.

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