Delta Life Insurance, which was to hold its board meeting on April 11 to adopt its financial statements for three consecutive years, postponed it on Sunday, according to the Dhaka Stock Exchange (DSE).
The first stock exchange has already asked for the specific reasons for the postponement of the planned meeting, as the development makes shareholders wait even longer.
“Here arose a procedural complexity and we explained it to the exchange today,” said Miltan Bepari, additional managing director and chief financial officer (CFO) of Delta Life.
The issue centers on the recent resignation of the chairman of the company’s audit committee, who is an independent director.
Sakib Aziz Chowdhury, an independent director on the court-approved board of directors of Delta Life, after resigning for personal convenience, was to be replaced by a new independent director, Khondaker Sabbir Mohammad Kabir.
The company has applied to the Insurance Development and Regulatory Authority (IDRA), the Bangladesh Securities and Exchange Commission (BSEC) and the Financial Institutions Division of the Ministry of Finance to approve the change in its board of directors, according to Miltan Bepari.
However, since the council was formed following a ministry-brokered and court-approved agreement between the parties involved, the regulator has asked the company to ensure that the Supreme Court approves the change. propose.
Meanwhile, the three-week Supreme Court vacation began on Sunday, Miltan Bepari said, adding that the board meeting would likely be held after the vacation as the company’s attorney has been instructed to seek the court approval.
A crucial board seat
Delta Life’s court-approved board had two independent directors – Hafiz Ahmed Mazumder, chairman of the board, and Sakib Aziz Chowdhury, who recently resigned before the accounts were finalized.
Independent directors are not shareholders of a corporation, but serve the board of directors as members to protect the interests of shareholders.
Chowdhury’s resignation was crucial since he was the chairman of the company’s audit committee which validates the financial statements.
Without the chairman of the audit committee, the adoption of the financial statements was not possible, Bepari said.
The Corporate Governance Code requires that the chairman of the audit committee be an independent director, while it prohibits the chairman of the board of directors from sitting on the audit committee.
This is why without the appointment of a new independent director, the closing of the accounts was not possible.
The long wait for shareholders
The scheduled meeting was to review the company’s financial statements and recommend dividends for 2019, 2020 and 2021 together.
Shareholders of the country’s first private sector life insurer have not received any dividends or financial statements since 2019.
The delay was caused by the company’s struggle with Idra as it did not approve the actuarial valuation basis for 2019, and later in March 2021 the regulator suspended Delta Life’s board of directors and appointed a director to run the company.
“Under the administrator, we could not hold a board meeting because the regulator suspended the board for 19 months,” Miltan Bepari said.
The emergency ended in September last year with the removal of the receiver and the handing over of the company’s board to a group of sponsors, shareholders and independent directors.
The next board meeting was convened as soon as the company obtained court approval to hold a postponed annual general meeting of shareholders.
Delta Life faced a decline in annual premium income due to the pandemic in 2020 and rebounded in 2021, according to its unaudited figures reported to Idra.
However, even under the administrator, the company’s premium income rose to Tk 763 crore in 2021 to surpass that of the pre-pandemic year. Meanwhile, the company’s total life insurance fund fell to Tk 3,954 crore at the end of 2021 from Tk 4,120 crore at the end of 2020, according to unaudited data the company submitted to Idra.
The stock price falls
Shares of Delta Life, with a face value of Tk10 each, soared to Tk158 last week on hopes of multi-year dividends and the postponement of the meeting dragged it down to Tk143 on Sunday at the DSE. It varied between Tk62 and Tk232 over the past three years.