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.

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Interestingly, 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.