Pragati Life faces Tk47.63cr in doubtful investments
The auditor has flagged that Tk47.63 crore of Pragati Life Insurance's investments are doubtful in terms of recovery, warning that the amount could result in a significant financial loss for the company.
According to the auditor's opinion for 2024 published on the Dhaka Stock Exchange (DSE) today, Pragati Life holds Tk95.39 crore in balances with other banks and financial institutions, along with an investment of Tk98.50 lakh in the UFS–Pragati Life Unit Fund. The auditor also noted an advance and deposit of Tk79.80 lakh to Jamuna Resort Limited.
Out of these amounts, Tk47.63 crore investments are doubtful in terms of recovery, said the auditor in the audit report for 2024.
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Despite these concerns, Pragati Life has made a provision of only Tk6.70 crore against the potentially impaired investments. The board has approved a plan to fully make the provision within five years and is also considering legal action to recover the funds.
The auditor, however, stated that their opinion on the financial statements was not modified in respect of this matter.
The audit report further revealed that the company has fixed deposits in several troubled banks and non-banking financial institutions, including Padma Bank, Premier Bank, Social Islami Bank, National Bank, Bangladesh Industrial Finance Company, Fareast Finance, FAS Finance, First Finance, IIDFC, International Leasing, Premier Leasing, Prime Finance and Union Capital. The amounts deposited range from Tk1.35 crore to Tk10.43 crore in each institution.
In addition, the Bangladesh Securities and Exchange Commission (BSEC) noted that the UFS–Pragati Life Unit Fund is managed by Universal Financial Solutions (UFS) Limited, which allegedly embezzled funds from mutual funds under its management.
Both the BSEC and the Anti-Corruption Commission have taken legal action against the fund manager, while the trustee of the fund, Investment Corporation of Bangladesh, has also filed a separate case.
For 2024, Pragati Life has recommended a 15% cash dividend. The company's annual general meeting will be held on 14 September, with 19 August set as the record date.
Since 15 June, Pragati Life's share price has jumped by 70%, reaching Tk135.50 on the Dhaka Stock Exchange as of 12 August.
