SECOND EDITION
THURSDAY, MAY 26, 2016
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Jyoishtha 12, 1423, Shaban 18, 1437
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Regd No DA 6238, Vol 4, No 33
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www.dhakatribune.com | 32 pages | Price: Tk10
Meghna Life conceals Tk100cr extra expense Corruption has long been endemic in the insurance sector of Bangladesh, and the lax enforcement of the new insurance act of 2010 has not helped. Shocking levels of irregularity were revealed recently when regulators audited several leading insurers. In the second of a series, Dhaka Tribune's Jebun Nesa Alo looks into what auditors found For three years straight, authorities at Meghna Life Insurance – one of the leading insurers in Bangladesh – had been concealing its excess management cost of around Tk100 crore from the regulators. Insurance Development and Regulatory Authority (IDRA) found the inconsistencies in Meghna Life’s consolidated statement of selected financial indicators for 2012, 2013 and 2014 – when it hired auditors Masih Muhith Haque and Co to go through the accounts of the insurance company. Following the findings, the IDRA recently served a show-cause
notice to Meghna Life, asking why punitive action should not be taken against the company for violating the insurance act. The Dhaka Tribune visited the company’s headquarters to get comment from its Chairman Nizam Uddin Ahmed and Managing Director NC Rudra. Both of them refused to meet with this correspondent or provide any statement on the allegations. According to the IDRA notice, Meghna Life Insurance – between 2012 and 2014 – had shown that its total excess management expense was around Tk48 crore: Tk23.66
crore in 2012, Tk17.25 crore in 2013 and Tk7 crore in 2014. But the auditor found that the actual amount was Tk129.44 crore – almost 2.7 times more than what was claimed. Of the excess spending, Tk67.28 crore was spent in 2012, Tk43.31 crore in 2013 and Tk19 crore in 2014. Most of the bills of Meghna Life were paid in cash instead of through banking channels. Paying insurance agents commissions that were way above the regulatory limit was one of the main reasons behind the high management cost, the auditor identified.
According to the audit report, beyond the certain limit of 35% commission allowed, the insurance company paid an additional 33% commission to agents in 2012, 29% in 2013, and 18% in 2014. In what was also another violation of the insurance act, the company mostly paid commissions to unauthorised agents. Unit managers and branch managers were also paid commission beyond the allowed limit. In December 2013, Managing Director NC Rudra was given Tk10 lakh in cash under Corporate Social Responsibility – which was unethi-
Starvation struggle for Bandarban hill people n S Basu Das, Bandarban Indigenous people in the remote hills of Bandarban are facing starvation as an acute food shortage resulting from poor crop yields has begun to bite. Thousands of people in Khoimukhipara, Remarky, Tindu, Boro Modok and Sangu Forest areas are foraging for food, even resorting to eating leaves from trees, local residents said. Remarky UP member Mang Chang Mro said the desperation of unbearable hunger was driving some locals to criminal activities. Hatiram Tripura of Remrky area said he and his six family members were facing a hard situation without food. “We have suffered for more than three days, but no government agency or NGO has come to help us,” said he. According to local sources, their hardship is the result of wild boars destroying crop fields coupled with recent bad weather. Crop prices have also hit farmers hard.
INSIDE
PAGE 2 COLUMN 1
Ctg people fearing gridlock during Ramadan
Chittagong city dwellers fear that massive traffic gridlock may take place during Ramadan due to ongoing development projects. PAGE 7
cal and a violation of income tax ordinance and the insurance act, the audit report read. The insurance company also dodged tax of around Tk88 lakh between 2012 and 2014. According to the income tax ordinance, insurers have to deduct 5% source tax on commissions, but Meghna Life deducted less than the required amount. Their source tax deduction was Tk22.27 lakh in the year 2012, Tk65.39 lakh in 2013 and Tk32,811 in 2014. The auditor also found rule violation in the use of company cars. PAGE 2 COLUMN 5
HC orders Tk50 lakh payout for mistrial n Ashif Islam Shaon
With an acute food shortage prevalent in the remote hills of Bandarban, locals are being forced to eat wild potatoes – which are often inedible – to survive. The photo was taken recent in Remarky of Thanchi upazila DHAKA TRIBUNE
The High Court has ordered the government to pay Tk50 lakh to a man who was convicted of rape under inappropriate legal provisions 15 years back. The court also threw out the lower court's sentence of life term for Abdul Jalil from Bhola and ordered jail authorities to release him immediately if he is not accused in any other case. The full details of the verdict pronounced by Justice AFM Abdur Rahman on December 15, 2015 were made public yesterday. Jalil was 15 years old and therefore underage when he was charged with rape in 2001. But instead of a trial under the Children’s Act, he was tried under the Women and Children Repression Act, which is applicable to adults. The High Court said the trial court's judge could not avoid liabilities in this wrong conviction. PAGE 2 COLUMN 3
‘Who do you think you are kidding, Mr Johnson?’
Shahriar rubbishes IS claims
As a former journalist who made his name by bashing Brussels but was sometimes accused of twisting the facts, Boris Johnson knows there’s no easier way to hook readers than to lead with Hitler. PAGE 9
International militant group Islamic State is trying to ride a wave of religious radicalisation by falsely claiming a spate of killings in Bangladesh, State Minister for Foreign Affairs Shahriar Alam has said. PAGE 32