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Deceased Person Presented as Insurance Company Director, Resulting in Loan Acquisition

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insurance

In a remarkable turn of events, an insurance company has been listed in the share market with the name of a deceased individual as its director.

The company has also obtained a loan from a foreign financial institution, pledging the shares of the deceased as collateral. These astonishing revelations have come to attention regarding Rupali Insurance Company Limited, a prominent player in the market. Over the past decade, the company’s management has even acknowledged the presence of the deceased individual as their director, leading to some alterations in the name associated with the position. These intriguing details have been uncovered through a financial investigation.

According to sources, the founder and managing director of Rupali Insurance, Md. Nazim Uddin Khan, who had reportedly passed away in critical condition at Dhaka’s Dhanmondi Nursing Home in May 2012, is currently being seen as the company’s director. However, it has been eleven years since Md. Nazim’s demise, and yet he continues to hold the position of director at Rupali Insurance.

It has been found that Md. Nazim Uddin Khan opened a beneficiary owner’s account (BO account) with EBL Securities Limited in 2010. The BO account number is 1201950039331363. At present, this account holds 21 lakh 15 thousand 802 shares of Rupali Insurance. However, among these shares, 18 lakh 31 thousand 864 shares are identified as being pledged to EBL Securities.

The investigation reveals that these pledged shares have been transferred to Uthara Finance Capital. The circumstances surrounding the pledge of these shares remain unclear, with no conclusive response from either EBL Securities or Rupali Insurance management. Despite the passing of Md. Nazim Uddin Khan in 2012, his wife and children wanted to take over the shares of Rupali Insurance, but the company kept delaying.

According to the report from the Central Information Bureau (CIB), it has been found that there is no loan in the name of Md. Nazim Uddin. This raises the question of who took a loan by pledging Nazim Uddin’s shares. How did Uttara Finance acquire the loan from EBL Securities? And who authorized this loan? No institution has provided satisfactory answers to these questions.

Sources reveal that following a court order, Rupali Insurance granted permission to the successors of the deceased director to claim the shares. However, the beneficiaries have not been able to claim the shares in the name of Nazim Uddin so far. Rupali Insurance, Uttara Finance, and EBL Securities have alleged that they are unable to trace the shares in question. The family of Nazim Uddin Khan sent a letter to the managing director of EBL Securities on May 18th, expressing their concerns. The letter seeks information about when the shares were pledged according to the instructions of the shareholders.

In regard to this matter, Siraj Uddin Khan Mintu, the eldest son of the late Nazim Uddin Khan, stated to Orthosongbad, “My uncle used to be the director of Rupali Insurance at one point. After my father’s demise, my aunt took care of these matters. We were unaware of these issues back then. Now, following the court order, Rupali Insurance has transferred the shares.” Upon contacting EBL Securities after obtaining the transfer, it was revealed that the shares are held in a pledged state.

However, they have not provided any information regarding why the shares are pledged. They have instructed us to request share lock removal from CDBL. Upon contacting CDBL, we were informed that this is not their responsibility but rather they suggested that we file a complaint with them.

Read More: Insurance Sector Emerges as Top Gainer on DSE in the Recent Week

insuranceInterestingly, even though Nazim Uddin Khan passed away in 2012, he is still being shown as the director of Rupali Insurance in the company’s 2022 annual report, according to sources. Although Rupali Insurance only refers to him as Nazim Uddin, the annual report does not include a photo of him, despite featuring photos of other directors. Additionally, EBL Securities has allegedly replaced the photo in Nazim Uddin Khan’s BO account, as claimed by his relatives. This fact has also been verified through the investigation conducted by Orthosongbad.

Efforts to contact the Managing Director (MD) of EBL Securities, Mr. Sayadur Rahman, regarding the allegations have been unsuccessful. However, Farhad Morshed Sunny, the responsible employee of the organization, informed Orthosongbad that the account of Md. Nazim Uddin has been suspended in the BSEC (Bangladesh Securities and Exchange Commission). It was the legal heir who applied for the suspension in the BSEC. We have informed them to lift the suspension order.

According to Mr. Morshed, the client (Md. Nazim Uddin) and Rupali Insurance can provide information on how shares were held (locked). The client’s name does not match the name on the B/O account and the death certificate. Essentially, EBL Securities has no knowledge about this matter.

Farhad Morshed stated that they are not obstructing any assistance. We are obligated to comply with the High Court’s order. However, due to the account suspension, we are unable to provide clarification regarding the shares. Nevertheless, the family of Nazim Uddin claims that they did not submit any application to suspend the account.

To know more, the Managing Director of Uttara Finance Capital Management, Mohammad Shahinur Rahman, stated that it is difficult to speculate on the reasons for the share lock. Shares are typically locked as collateral against loans. Even though we have the share lock, we cannot specify the reason behind it. The primary company can provide that information.

Mohammad Atiqur Rahman, the Secretary of Rupali Insurance Company, informed Orthosongbad that Mr. Nazim Uddin Khan was the Managing Director until 2022, but he is no longer with us. We have no knowledge of his death in 2012. Hence, he continued to be on the board for all these years. Regarding the selection of a Managing Director even after a person’s demise, he stated that it is a matter for the management. I do not wish to discuss these matters over the phone.

In a perplexing turn of events, the question of how a debt was taken out in 2017 when the person had passed away in 2012 remains unanswered. The company secretary stated that he had no knowledge of such a matter and it is only known to those who hold the shares. It is necessary to inquire the company to gather information. However, I was not the company secretary at that time in Rupali Insurance. Nevertheless, we have granted permission for the transfer of shares to the successors of Nazim Uddin Khan. Due to the matter of share transfer being subject to the approval of the board, there has been some delay.

According to Al-Amin, an assistant professor in the Department of Accounting and Information at Dhaka University and a financial analyst, if such incidents occur, they are undoubtedly unpredictable, chaotic, and irregular. It is impossible to take any action without the consent of the board responsible for shareholding and pleas. If such incidents occur, the entire board is held accountable. The reason behind the absence of a board member during a board meeting also needs to be explained. It is not possible to keep the deceased person on the board without the decision of the board. Therefore, the entire board is responsive in this regard.

To know more about this matter, Md. Rezaul Karim, the spokesperson and managing director of the Bangladesh Securities and Exchange Commission (BSEC), who stated that he is unaware of the issue. The SRMIC Department of the BSEC is overseeing this matter. If a specific complaint is received, the commission will take legal action against the culprits.

It is worth mentioning that as per Section 377 of the Succession Act of 1957, the High Court ordered to allocate shares of Rupali Insurance to the wife and children of Nazim Uddin Khan. According to the High Court’s directive, his wife, Haji Rokeya Begum, will receive 2 lakh 64 thousand 475 shares. His two sons will receive 4 lakh 62 thousand 831 shares in total, and the four daughters, Rahima Zaman, Fahima Wahid, Shamima Namij, and Sayma Nazim, will each receive 2 lakh 31 thousand 415 shares.

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Dhaka Bourse Continues Positive Trend

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Dhaka Stock Exchange DSE, Bourse on the third working day of the week, December 5, ended with price Index hikes  & turnover drops. This information is known from DSE sources.

460 crore shares were traded on this day. 31 crore 78 lakh less trading was done in DSE today compared to the previous workday, 4 December, Shares worth Tk 491 crores 78 lakh shares were traded last time, Monday.

The benchmark DSEX added 3.16 points or 6,247 The Shariah-based index DSES gained 1.79 points or 1,359, and the blue-chip index DS30 decreased by 0.65 points or 2,113.

Of the issues traded, 60 advanced, 94 declined and 170 remained unchanged.

Capitec Grameen Bank Growth Fund ranked top gainer on DSE, the share price increased by Tk 1.10 paisa or 10.00 percent. On this day, the share was last traded at Tk 12.10 paisa.

GQ Ball Pen Industries Limited ranked top loser on the DSE, the share price dropped by Tk 13.20 paisa or 7.51 percent. On this day, the share was last traded at Tk  162.60 paisa.

DSE topped on trade is Central Pharmaceuticals Limited 25 crore 58 lakh takas of shares of the company have been traded.

A total of 62 companies’ shares were traded in the Block on the Dhaka Stock Exchange, 41 lakh 30 thousand 415 shares of the companies were traded. The financial value of which is 18 crore 12 lakh taka.

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Dhaka Bourse Sustains Winning Streak

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DSE Bourse Turnover

Dhaka Stock Exchange DSE, Bourse on the second working day of the week, December 4, ended with price Index & turnover hikes. This information is known from DSE sources.

491 crore 78 lakh shares were traded on this day. 142 crore 77 lakh more trading was done in DSE today compared to the previous workday, 30 November, Shares worth Tk 349 crores 1 lakh shares were traded last time, Sunday.

The benchmark DSEX added 12.45 points or 6,244 The Shariah-based index DSES gained 1.92 points or 1,357, and the blue-chip index DS30 increased by 5.69 points or 2,114.

Of the issues traded, 107 advanced, 49 declined and 169 remained unchanged.

Bangladesh Autocars Limited ranked top gainer on DSE, the share price increased by Tk 13.10 paisa or 9.95 percent. On this day, the share was last traded at Tk 144.70 paisa.

Jute Spinners Limited ranked top loser on the DSE, the share price dropped by Tk 13.50 paisa or 4.13 percent. On this day, the share was last traded at Tk  313.10 paisa.

DSE topped on trade is Khulna Printing and Packaging Limited 27 crore 24 lakh takas of shares of the company have been traded.

A total of 54 companies’ shares were traded in the Block on the Dhaka Stock Exchange, 37 lakh 64 thousand 536 shares of the companies were traded. The financial value of which is 28 crore taka.

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BSEC Undergoes Major Restructuring

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The Bangladesh Securities and Exchange Commission (BSEC) has undergone significant restructuring, bringing about substantial changes in the responsibilities of officials from commissioners to assistant directors. According to BSEC sources, this restructuring involves the reassignment of two commissioners, four executive directors, eight directors, two additional directors, and eight assistant directors to different departments.

As per BSEC, Professor Dr. Sheikh Shamsuddin Ahmed, the Commissioner has been assigned the responsibility of the Division of Issuer Companies Affairs, Corporate Finance, and Financial Literacy Division within the Market and Intermediaries Affairs Division. On the other hand, the Chief Accountant Division’s responsibility has been given to another BSEC Commissioner, M. Abdul Halim.

Additionally, Abdul Halim has been entrusted with the Market Intelligence and Investigation Division and Derivatives Division. Meanwhile, he will also oversee the duties of the Chief Accountant Division. BSEC Chairman Professor Shibli Rubayat-Ul-Islam will directly oversee the Administration and Finance Division and the Commission’s Secretariat Division.

Mohammad Anwarul Islam, the Executive Director of BSEC, has been assigned the responsibilities of the Derivatives and Research and Development Divisions. Simultaneously, he will be responsible for the Investment Management Division. Executive Director Mohammad Rezaul Karim will oversee the responsibilities of the Compliance Division in addition to his existing role in the Legal Division. Executive Director Mohammad Shafiul Azam has been assigned to the Financial Literacy Division. Executive Director Mohammad Jahangir Alam has been given charge of the Market and Intermediaries Affairs Division. Besides, the responsibilities of eight directors, two additional directors and eight assistant directors of BSEC have been redistributed.

BSEC Secretary Division’s responsibilities have been assigned to Director General Muhammad Mahmudul Haque. Director General Pradip Kumar Basak will continue to oversee the responsibilities of the Administration and Finance Division, with additional duties in the Accounts and Finance Department. Director General Mohammad Abul Kalam will manage the responsibilities of the Division of Issuer Companies Affairs, alongside his role as the Chief Accountant of the Division. Director General Md. Mansoor Rahman has been assigned the responsibility of the existing Issuer Company Affairs Division as well as the Market and Intermediaries Affairs Division. Director Mohammad Abul Hasan has been given the responsibility of the Investment Management Division and Derivatives Division.

The Division of Derivatives and the Derivatives Division will be led by Director General Sheikh Mahbubur Rahman. Furthermore, Director General Abu Rayhan Mohammad Mutasim will be in charge of the Internal Audit and Compliance Division, in addition to his role in the Research and Development Division. Director General Mohammad Fakhrul Islam Mojumdar will assume responsibilities for the Corporate Finance Division and the Enforcement Division. Lastly, Director General Mohammad Fakhrul Islam Majumder will head the Corporate Finance Division and the Enforcement Division.

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