Fareast Islami Life Insurance Company – once a top premium earner among the country’s life insurers – is going to sell three pieces of land located at Gulshan, Kakrail and Feni to pay claims by policyholders, which have been due for several years.
According to the Insurance Development and Regulatory Authority (IDRA), it has approved Fareast Islami Life’s plan to sell the properties to settle outstanding client claims. The move aligns with IDRA’s firm stance on restoring public trust in the insurance sector.
Earlier, IDRA Chairman M Aslam Alam emphasised that insurance companies must settle claims on time — even if it requires selling their assets.
According to IDRA data, Fareast Islami Life had total outstanding claims of Tk2,976 crore as of the end of March this year. Of that amount, the company had paid only Tk58.35 crore, leaving 98% of claims unsettled.
Keep updated, follow The Business Standard’s Google news channelThe company published a notice to sell the lands recently, but did not disclose it to the stock exchanges which is non-compliance as per the listing regulation.
Shahidul Islam, acting CEO, and Sheikh Khaled Zahir, company secretary of Fareast Life, could not be reached for comments as they did not pick the phone despite repeated attempts.
According to the company’s notice, the life insurer will sell a 33 decimal land with a one-storied building at Gulshan-2, 32 decimal land with a four-storied building at Kakrail and 15 decimal land with a two-storied building at Feni. The company requested the interested buyers to submit their proposals by 7 August. However, the company did not mention the value of the land.
Amid the company’s deteriorating financial condition, the Bangladesh Securities and Exchange Commission (BSEC) appointed Shiraz Khan Basak & Company, a chartered accounting firm, in April 2021 to conduct a special audit of Fareast Islami Life Insurance.
The audit was commissioned following allegations that the insurer had failed to settle customer claims and make payments on matured policies.
The audit report revealed that approximately Tk2,367 crore had been embezzled by top executives. In addition, accounting irregularities amounting to Tk432 crore were uncovered.
Former chairmen Nazrul Islam and MA Khaleque, former CEO Hemayet Ullah, along with several former directors and senior officials, were implicated in the misappropriation.
Funds were primarily siphoned off through two methods: purchasing land at inflated prices and obtaining bank loans by mortgaging the company’s Mudaraba Term Deposit Receipts.
In response, the BSEC dissolved the company’s board and dismissed CEO Hemayet Ullah in September 2021.
Later in 2022, under the leadership of Shibli Rubayat-Ul-Islam, the BSEC permitted individuals linked to the Beximco Group to join Fareast Islami Life’s board. Prior to their appointment, Beximco-affiliated firms had acquired shares in the company.
Following the change in government, both the Beximco-linked board members and the BSEC-appointed independent directors resigned.
After their departure, former sponsors – who had been forced out of the company between 2009 and 2011 – returned to Fareast Islami Life and resumed control of the board.
The company, which was incorporated in Bangladesh in 2000, got listed on the country’s stock market in 2005.
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