Why Delta Life again halted board meeting

Delta Life Insurance, on Thursday, again halted its board meeting scheduled for the same day and the postponement of the much awaited meeting to review three years' annual reports and dividends hurt investor sentiment.

A sharp selloff made Delta Life the top losing stock on the Dhaka Stock Exchange on Thursday as it closed 6.4% lower at Tk144.3.

"Unfortunately, our audit committee chairman fell sick. Without him, the accounts cannot be placed at the board meeting," said Uttam Kumar Sadhu, company secretary of Delta Life.

"Hope we can fix the next date for the board meeting by the middle of the month and accomplish the annual general meetings (AGMs) within the stipulated date of 4 October," he added.

Tussle with regulator ended, now it is internal

The first private sector life insurer in the country has a history of getting through battles among sponsors, shareholders for dominating the board. Dividends and AGMs pending for years due to lawsuits were common for its shareholders.

The company in 2022, through a series of legal battles, got rid of the administrator appointed by the insurance regulator in early 2021. Over the period, its accounts and AGMs for 2019, 2020, 2021 were pending.

Last year, the Ministry of Finance mediated the construction of an interim board out of sponsor family members, public shareholders and independent directors. The Supreme Court mandated the interim board to hold the pending AGMs and appoint directors democratically.

Company sources said the number of board seats under control has emerged as the new apple of all discords within the company now. And, that was the main reason behind meeting postponements twice in a row.

Md Altaf Hossain Howlader, a shareholder of the company, filed a petition to the company bench of the high court last year seeking AGM and board formation in a way that complies with the insurance regulations. The case was dismissed on Wednesday as the high court found it redundant after its superior appellate court had already instructed on how to hold the AGM.

It all was about formation of the new board in the next AGM in compliance of both the Insurance Act and the Bangladesh Securities and Exchange Commission's (BSEC) law, said Barrister Sayed Mahsib Hossain who along with Barrister A M Masum represented the securities regulator.

"The court, during the dismissal order, asked for compliance with both the insurance and securities Laws," he added.

Company sources said securities laws nowadays do not recognise sponsor shareholders' descendants the same unless they were founding shareholders. The opponents were trying to use this card to reduce board seats for Delta's lion shareholding family as the family was outnumbering within the board while two of the descendants of the sponsor were non-sponsor directors.

Insurance act asked firms to form their board with a proportionate mix of sponsors, shareholders and independent directors.

Negotiations among the sponsors and directors were going on regarding which group would get how many seats in the upcoming board to dominate.

And the negotiation appears to be crucial for the general shareholders as they are waiting for AGMs and dividends.