Tk 3,687cr anomalies: Delta Life Insurance’s rejoinder and our reply

Delta Life Insurance Company Limited on Sunday sent a rejoinder to our report titled “Auditor finds Tk 3,687cr anomalies in Delta Life Insurance” published on December 4.

Following is the full text (unedited) of the rejoinder, undersigned by Zeyad Rahman, director of Delta Life Insurance:

The report stated that IDRA has detected Delta Life Insurance Company’s Board and Management involved in irregularities or embezzlement in Tk. 3,687 crores is completely baseless.

The whole process of appointment of an administrator in Delta Life (a AAA rated company for the past 5 years) is under judicial review as the appointment came as an after-thought by the IDRA Chairman, Dr. Mosharof Hossain when the Company filed a complaint against him at the Anti-Corruption Commission for demanding illegal gratification of Taka 2 crores, the conversation of which had been recorded. The IDRA Chairman then at various instances admitted that he did indeed seek money from the Company but it was for an unnamed ‘Sir’.

ACNABIN came into the picture when the first special auditor, Aziz Halim Khair Chowdhury and Co., appointed by the first administrator, Sultan ul Abedin Mollah, on IDRA Chairman’s instance became controversial. Aziz Halim Khair Chowdhury and Co. ‘s Partner, Dr Jamshed Chowdhury after being appointed by the Administrator approached the Sponsors of Delta Life and asked them for audit work of their other businesses and in return he would submit a favorable report in relation to Delta. When the Sponsors of Delta declined, he started to submit false and baseless reports against the Board. A complaint has been made against this audit firm and its Partner seeking cancellation of license and ICAAB and FRC are investigating the matter. It is important to mention that IDRA Chairman, Dr Mosharof Hossain was an article student of this very firm which was previously black-listed by Bangladesh Bank for being involved in a TK 3000 crore scam involving Janata Bank Limited. Furthermore, Aziz Halim has already submitted an audit bill of Tk 1.5 crores to Delta which is unrealistic, over-inflated and a gross violation of their audit terms.

The ACNABIN report that has been mentioned in the article is a provisional interim report. No basis has been provided and all possible allegations made there have been mentioned categorically as ‘possible irregularities’. Once the report matures, the auditors will meet with the Board and the Management and we are confident that all their queries and objections, if any will be addressed. Furthermore, submission of an interim audit report by the IDRA to the Financial Institutions Division of the Ministry of Finance is a clear violation of Section 96(1) of the Insurance Act and Clause 3 of the Terms of Reference of the Administrator, both of which require a full and final report as opposed to any interim reports.

Embezzlement of Tk 3687 crores is impossible and completely baseless. Delta Life has a life fund of around Tk 4200 crores, out of which approximately Tk 1500 crores are in Government Securities, Tk 1400 crores are in the capital market, Tk 765 crores are in Fixed Deposits in various Banks, Tk 210 crores are in land and building properties, about Tk 140 crores investment in its wholly owned subsidiary, DLIC Securities Limited, Tk 100 crores plus in premium collection accounts in the various bank accounts and Tk 75 crores in Home and other Loans against Insurance policies. Policyholders, shareholders and other interested parties are more than welcome to verify these figures with Delta management. Therefore, Tk 3687 crores being embezzled is not only baseless but also humanly impossible.

We are further disturbed by the fact that an internal letter from the IDRA to the FID carrying such false, baseless and misleading information has been intentionally advertised in this manner in the public domain by IDRA. It makes us wonder how much the IDRA Chairman is interested in fairly regulating the insurance sector as opposed to deflecting the attention of the public from the widespread news of corruption and money laundering allegations on him which the Anti-Corruption Commission and the Bangladesh Financial Intelligence Unit are investigating.

Our reply:

Our report was based on a document sent by IDRA to the Secretary of the Financial Institution Division on December 1. Md Shah Alam, director of IDRA, signed the letter, a copy of which is obtained by the Business Insider Bangladesh. Whatever facts and figures we have used in the report were in the document. Moreover, we have taken comments from Md Quddus Khan, administrator in Delta Life Insurance.