Friday, 1 July, 2022

Nepotism destroys Delta Life Audit reveals massive anomalies

Delta Life Insurance has fallen into a crisis due to irregularities and nepotism committed by former Chairman Monzurur Rahman as an independent audit found anomalies worth Tk 30 billion in the publicly listed company.

Most allegations evolve around Monzurur who inducted his two sons to the company’s board to pave the way for uninterrupted embezzlement of money from the insurance company, shows the audit report.

The Insurance Development and Regulatory Authority (IDRA) launched an audit of the company by a third-party audit firm on the backdrop of increasing allegations of anomalies against Delta Life.

IDRA suspended then Delta Life chairman Monzurur Rahman’s family-dominated board on February 11 last year and appointed an administrator to the company.

The previous board erased a huge amount of data from the server of the company which is a punishable offence under the Digital Security Act. Some 2,200 policies could not be verified for lack of bank statements, bank books and reconciliations, according to the audit.

The ACNABIN Chartered Accountants, auditor for Delta Life, alleged that the money was embezzled by hiding the maturity of the policies, paying an extravagant dividend on inflated accounts, and withdrawing money without record and other means.

The perpetrators misappropriated Tk 51.46 million in the name of agent commission; paying higher dividends and downgrading claims by Tk 25.13 billion.

The broad provided additional profits worth Tk 8.94 million without provisioning the retirement benefits. Monzurur used an expensive vehicle of Delta Insurance for his business firm -- Rema Tea. The corrupted official spent Tk 9.01 million for maintenance of the vehicle and paid salaries Tk 44.27 million to the staff of his own company (Rema Tea).

He transferred Tk 7.8 million illegally for developing a Trust violating insurance law and paid Tk 1 million as monthly salaries to foreign staff without proper approval from the authorities.

The audit report found that Monzurur Rahman embezzled Tk 14.89 million through the fabrication of cash balance and withdrew Tk 8.8 million without an entry on the pretext of dubious payments.

The board wasted Tk 11 million on foreign trips of some outsiders and paid salaries of Tk 1.59 million to ex-CEO Adiba Rahman without permission of the authorities concerned. Delta Life did not pay Tk 1.38 billion to the insured despite the maturity of policies or deaths.

The audit firm detected more irregularities which include constituting the board with more than two members of a family, holding 22.78 percent share by a single family, allowing officials to raise motivated proposals in the AGM and accepting those, and being present on the board of directors and audit committee on the part of Chairman Monzurur and not preserving unclaimed dividend in the bank.

Anti-Corruption Commission had also launched an investigation against the sea of corruption committed by Delta Insurance.

On February 2, ACC sent a letter to the administrator of the insurance company asking for an audit report and supporting documents. The anti-graft watchdog is yet to send any notice to the former chairman and members of the board.

IDRA Chairman Dr M Mosharraf Hossain said that the regulatory body was astonished by the colossal embezzlement at Delta Life Insurance.

He said to have helped the company to repair some irregularities affecting the interests of the clients, but the towering corruption revealed by audit is alarming.