Everest Insurance, whose top officials and promoters are facing charges of embezzlement and fraud, is once again under the control of people close to Rajendra Khetan, one of the largest shareholders in the non-life insurer, who, apparently, played the key role in bringing troubles to the company.
This was evident as five of the company’s seven board members elected today through a special general meeting are either close to Khetan himself or his supporters at the insurance company.Those elected as board directors today are: Sashi Agrawal, Rajan Kumar Poudel, Surendra Silwal, Niranjan Kumar
Tibrewala, Pawan Kumar Shanghai, Arun Adhikari and Purushottam Raj Bhattarai.“Of these, Agrawal, Silwal and Adhikari are Khetan’s people,” a reliable source said. “Poudel, on the other hand, is close to Birendra Kumar Shah and Om Prakash Sikaria — two promoters of Everest who are close to Khetan — while Shanghai is the brother of Ratan Lal Shanghai, who is another promoter of Everest who supports Khetan.”
Pitted against this group is Tibrewala, one of the major shareholders in the company, who is said to have issued ‘notes of dissent’ against most of the controversial decisions taken by the previous board that played a key role in landing the company in soup. “The only person who is likely to support him in the new board is Bhattarai,” the source said.
However, the Insurance Board (IB), the insurance sector regulator, whose team held today’s special general meeting, did not give a clear answer on what it thought of the composition of the new board.
“Our job was to hold the meeting within the deadline given to us by the board, and we accomplished the task. And we hope the new board will execute its task in a more responsible manner,” said Santosh Prasain, a chartered accountant at the IB, who is leading the management team deputed by the IB at Everest Insurance.
The Insurance Board had taken over the management and board of Everest Insurance in October, after the company failed to run its business properly and continued to flout insurance rules and regulations. Prior to this, the IB had suspended the then CEO Kebal Krishna Shrestha, the company’s board members and former chairman Khetan.
The IB says it had to take these actions as the company repeatedly failed to heed its calls for reforms.
Trouble started brewing in the insurance company more than a year ago after the IB suspended its fire portfolio, on charges it made payments to an insurance claim worth Rs 40 million, prior to submission of surveyor’s final report. The payment was made to Himalayan Snax, a company promoted by Khetan, in three installments of Rs 20 million and Rs 10 million each, twice.
Investigations later revealed that Himalayan Snax was extended insurance policy without obtaining all premium amount — a move that breaches the country’s insurance law. The IB then said issuance of policy in credit is equivalent to issuing no policy at all. And since no insurance policy was issued to Himalayan Snax, no compensation needs to be paid. This meant Rs 40 million extended to Khetan’s company had to be returned.
In addition, the IB also found that Khetan was extended compensation of Rs 19.7 million on different occasions between 2006 to 2012, on the back of insurance policies whose premiums were not paid. “Khetan has to return this amount as well,” the latest IB report says.
The IB has already reported these cases to Nepal Police’s Central Investigation Bureau.
source:the himalayan times,13 feb 2014
LINK
This was evident as five of the company’s seven board members elected today through a special general meeting are either close to Khetan himself or his supporters at the insurance company.Those elected as board directors today are: Sashi Agrawal, Rajan Kumar Poudel, Surendra Silwal, Niranjan Kumar
Tibrewala, Pawan Kumar Shanghai, Arun Adhikari and Purushottam Raj Bhattarai.“Of these, Agrawal, Silwal and Adhikari are Khetan’s people,” a reliable source said. “Poudel, on the other hand, is close to Birendra Kumar Shah and Om Prakash Sikaria — two promoters of Everest who are close to Khetan — while Shanghai is the brother of Ratan Lal Shanghai, who is another promoter of Everest who supports Khetan.”
Pitted against this group is Tibrewala, one of the major shareholders in the company, who is said to have issued ‘notes of dissent’ against most of the controversial decisions taken by the previous board that played a key role in landing the company in soup. “The only person who is likely to support him in the new board is Bhattarai,” the source said.
However, the Insurance Board (IB), the insurance sector regulator, whose team held today’s special general meeting, did not give a clear answer on what it thought of the composition of the new board.
“Our job was to hold the meeting within the deadline given to us by the board, and we accomplished the task. And we hope the new board will execute its task in a more responsible manner,” said Santosh Prasain, a chartered accountant at the IB, who is leading the management team deputed by the IB at Everest Insurance.
The Insurance Board had taken over the management and board of Everest Insurance in October, after the company failed to run its business properly and continued to flout insurance rules and regulations. Prior to this, the IB had suspended the then CEO Kebal Krishna Shrestha, the company’s board members and former chairman Khetan.
The IB says it had to take these actions as the company repeatedly failed to heed its calls for reforms.
Trouble started brewing in the insurance company more than a year ago after the IB suspended its fire portfolio, on charges it made payments to an insurance claim worth Rs 40 million, prior to submission of surveyor’s final report. The payment was made to Himalayan Snax, a company promoted by Khetan, in three installments of Rs 20 million and Rs 10 million each, twice.
Investigations later revealed that Himalayan Snax was extended insurance policy without obtaining all premium amount — a move that breaches the country’s insurance law. The IB then said issuance of policy in credit is equivalent to issuing no policy at all. And since no insurance policy was issued to Himalayan Snax, no compensation needs to be paid. This meant Rs 40 million extended to Khetan’s company had to be returned.
In addition, the IB also found that Khetan was extended compensation of Rs 19.7 million on different occasions between 2006 to 2012, on the back of insurance policies whose premiums were not paid. “Khetan has to return this amount as well,” the latest IB report says.
The IB has already reported these cases to Nepal Police’s Central Investigation Bureau.
source:the himalayan times,13 feb 2014
LINK
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