Taking control insurer’s management, the board has also barred the company’s former chairman Rajendra Kumar Khetan and his family members as well as current board members, whom the board identified to have violated the directive of the board leading to takeover from the IB, from holding any position in the insurance company for the next five years.
The insurance regulator said in a press statement that their shares in the company have also been frozen until the loss caused by their acts to the company is recovered.
IB Chairman Fatta Bahadur KC said the IB board took the decision on Tuesday after company’s management stopped its normal business activities several months ago.
The IB is sending a three-member team led by Chartered Accountant Santosh Prasai to take over the management of the insurer on Thursday. Other members of the team are IB’s Deputy Director Kundan Sapkota and Assistant Director Om Bahadur Adhikari.
The board has also formed an advisory committee headed by Suraj Bikram Shahi, an insurance expert at the IB, along with another expert Bhoj Raj Sharma. Other representatives will be appointed later as required, to work as board of directors in the company.
The management and advisory committee have been tasked to probe loss caused to the insurer by the previous board and management, recover the amount and take necessary action against them, the IB statement said.
They have also been mandated to hold annual general meeting within the next six months and hand over the management to the new board.
Everest Insurance plunged into trouble after the then management paid a claim worth around Rs 40 million to Himalayan Snax, the manufacturer of Mayos noodles, without receiving the final report from the surveyor.
The IB then slapped a monetary fine on the company and stopped the company from taking in insurances against fire. In response, the company stopped the entire business.
After the company was found guilty of honouring the claim through illegal settlement, the regulator had initially barred the company from issuing new policies. However, the IB later on limited its action against the company to restrict it only on the fire insurance after its employees resorted to protest, disrupting the company’s settlement work.
Five out of seven members overlooked the regulator’s order to be present with proper clarification, according to the IB. The board has also relaxed ban on fire insurance for the new management.
source: the kathmandu post,10 Oct 2013
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