I would have asked what the regulatory bodies are doing about this scheme but then I remembered they're in on it. Not like they're directly involved, but the people supposed to make sure things like this from happening are paid to look the other way.
This is what happens when people are left to do whatever they want.
In my country people don't patronize insurance companies much because of reasons like this. The companies do whatever they want and there is no one to fight for them, not even the justice department.
Topic: Say no to insurance - Beaware of Isurance scam (Read 312 times)
In Africa, people hardly patronize those insurance companies and schemes for two reasons;
One is because there's lack of adequate knowledge and understanding on what the benefits of such insurances thereby not allowing alot of Africans to trust the process.
Secondly, the average African person beliefs more of destiny of God and that God will be in control of every situation that's above there ability or capability in life and as such, many wouldn't be interested to opt in for a service they are told to benefit from after years. This is also as a result of the poverty rate in the continent.
“Why should I get life insurance, or any kind of insurance at all? God guarantees my life; He both gives and takes life. God will provide for whoever I leave behind, not insurance“, is what the majority number of Africans will respond to you on the issue of any insurances especially the Life Insurance schemes.
One is because there's lack of adequate knowledge and understanding on what the benefits of such insurances thereby not allowing alot of Africans to trust the process.
Secondly, the average African person beliefs more of destiny of God and that God will be in control of every situation that's above there ability or capability in life and as such, many wouldn't be interested to opt in for a service they are told to benefit from after years. This is also as a result of the poverty rate in the continent.
“Why should I get life insurance, or any kind of insurance at all? God guarantees my life; He both gives and takes life. God will provide for whoever I leave behind, not insurance“, is what the majority number of Africans will respond to you on the issue of any insurances especially the Life Insurance schemes.
Insurance isn’t a scam and while they’re at it making money as a business, they’re also paying out legitimate claims.
Things are different here in Bangladesh. I invite you to come and visit us. Read the whole thread before you comment. I literally provided two news of two insurance companies that already scammed millions of dollars of innocent people. These are the major companies operating in Bangladesh. I particularly wrote about the situation in Bangladesh which I already mentioned in my topic. I am sorry but do you talk like this in real life as well? without a comma or full stop? Do you continue to talk without breathing? That's hilarious.
Ohh my goodness, is there no way you can make all of this your post brief because it is really a buck of work reading this entire thread and I'm not a fan of reading long articles on the thread and your topic got my attention and I was Interested to know why we should avoid insurances and I couldn't even start after seeing how long the article is but one thing is that you shouldn't get involved with any online insurance and if you must get an insurance then you should try get the ones with physical locations and reputations to protect and also take enough time to read the terms of your insurance and what your insurance covers as I've noticed that most people barely take their time to read the terms a mind conditions of their insurances and what they cover and work on assumptions and get disappointed at the end.
Insurance isn’t a scam and while they’re at it making money as a business, they’re also paying out legitimate claims.
There are lots of insurance companies who aren’t licensed to operate and aren’t regulated. These types of sham insurance companies are the ones who go ahead to refuse paying out claims to policyholders or/and beneficiaries.
These people who go to rural areas to try to convince and later scam uneducated people know their mark. They’re mostly not licensed nor approved to run an insurance company. They’re scammers who go out and prey on the ignorant.
There are lots of insurance companies who aren’t licensed to operate and aren’t regulated. These types of sham insurance companies are the ones who go ahead to refuse paying out claims to policyholders or/and beneficiaries.
These people who go to rural areas to try to convince and later scam uneducated people know their mark. They’re mostly not licensed nor approved to run an insurance company. They’re scammers who go out and prey on the ignorant.
You can say its scam for now because you didn't use it but once you encounter a emergency for sure you will say that you're so lucky to get that insurance because your life didn't became so hard while you encounter health issues or any troubles which you can use your insurance.
Although there are really a sick insurance company that make your life hard when the time you need their service but still we can't generalize all as scam. Its just we need to select those good companies so that we will not be in trouble when there's emergency happens.
Although there are really a sick insurance company that make your life hard when the time you need their service but still we can't generalize all as scam. Its just we need to select those good companies so that we will not be in trouble when there's emergency happens.
As I already said, I have never seen someone claim their health insurance in my country. I don't think it works in Bangladesh. I have a bike and I have insurance for my vehicle. Insurance for motorcycles was mandatory but nobody gets paid once they crash their vehicle. Things might be different where you live. But these things do not work in Bangladesh. You can ask other Bangladeshi people if they have seen anyone claim their health insurance.
You can say its scam for now because you didn't use it but once you encounter a emergency for sure you will say that you're so lucky to get that insurance because your life didn't became so hard while you encounter health issues or any troubles which you can use your insurance.
Although there are really a sick insurance company that make your life hard when the time you need their service but still we can't generalize all as scam. Its just we need to select those good companies so that we will not be in trouble when there's emergency happens.
Although there are really a sick insurance company that make your life hard when the time you need their service but still we can't generalize all as scam. Its just we need to select those good companies so that we will not be in trouble when there's emergency happens.
I have never seen someone claim insurance for their vehicle in Bangladesh. I have never seen someone claiming their Life Insurance. Of course, there are some legit companies, and people maybe claim their insurance. But I haven't seen any of them IRL.
Three reasons have led to the insurance issues you are having in Bangladesh and they are corruption, religious sentiment, and illiteracy. I am sure the government knows about these fraudulent practices but they choose to overlook them because of bribery and corruption. Most of these scam insurance firms bribe some government officials not to take action to check these fraudulent activities. When people are blinded by religion they act without reasoning. People should understand that religion doesn't force people to be good, it is a personal decision to stay clean from crime. Therefore we have to choose a business based on the reputation of the firm and not based on religious affiliation. People always hide behind religion to commit crimes.
Illiteracy is another problem because, without a proper understanding of the terms of service, these firms will take advantage of the uneducated. Citizens should learn how to seek the services of legal or financial advisers before signing insurance contracts or agreements.
Quote
What is the Alternative?
Bitcoin could be an alternative. In Bangladesh, most people open insurance because they want to double their money after a certain period of time. There was a time when Banks offered double your money in five years scheme. But now it's eight to ten years. This is another popular method in Bangladesh which is called DPS (Deposit pension scheme). I will write about it another day. Since this is the main target, I don't think there are better options than Bitcoin. If you want something physical, buy land, and you may also consider Gold.
Bitcoin is not a money-doubling scheme or a get-rich-quick platform, so it might not be the alternative they seek. Most money-doubling schemes end up scamming their clients and closing up. Some of them that are well informed about bitcoin can decide to invest in bitcoin by adopting the DCA instead of investing in Ponzi or fraudulent insurance schemes Bitcoin could be an alternative. In Bangladesh, most people open insurance because they want to double their money after a certain period of time. There was a time when Banks offered double your money in five years scheme. But now it's eight to ten years. This is another popular method in Bangladesh which is called DPS (Deposit pension scheme). I will write about it another day. Since this is the main target, I don't think there are better options than Bitcoin. If you want something physical, buy land, and you may also consider Gold.
You can see how those innocent peoples scream after losing their life savings.
Having trust with some centralized institutions is what one has to be very careful of doing and think twice before taking a step, ever since the introduction of cryptocurrency, people have learnt in a large number how they can be independent with bitcoin in cryptocurrency to perform whatever their desired plan is, some believed they could secure their investment in bitcoin, some their pension plan, some their asset while some their investment plan, bitcoin can also serve the purpose of an insurance for us especially for the long time investors who had made some progress investing with bitcoin.
Being decentralized will not let you depends on some companies or organizations to work for you what you could actually achieve by yourself if you had been decentralized and privately conscious, scam now exists in many forms as long as you have to depend on third party institutions then you're not completely safe, thanks to a decentralized network with bitcoin that has been an avenue why some of us are independent today.
You have started a good topic here, dear Op, and this issue is not only in Bangladesh; it is happening in most of the progressing countries like mine. Where the laws are not followed strictly, these types of events occur most often, and the best practise is not to hand over your savings to these bulshy and scam platforms. My parents started a programme of giving banks some money after an interval of time, and we have to do this for like ten years, and after ten years we will be given back our money by 2X. And I am also religious, and after 3 years, I came to my senses and knew about it. Based on my beliefs, I asked my parents to shut this offer down.
Fortunately, they agreed on my decision (actually, the circumstances were not in my favor, so they have no other choice but to not continue that programe), but they really respect my decisions. Well, fun aside,
I really can understand the sorrow and rage of losing all the savings of 10 years, and those savings, as you said, if invested by those Millennials in BTC, they would be Billions by now. But that's how fortune or destiny played us. All we can do is still choose the best option for ourselves and avoid allowing many other families to ruin their future.
Fortunately, they agreed on my decision (actually, the circumstances were not in my favor, so they have no other choice but to not continue that programe), but they really respect my decisions. Well, fun aside,
I really can understand the sorrow and rage of losing all the savings of 10 years, and those savings, as you said, if invested by those Millennials in BTC, they would be Billions by now. But that's how fortune or destiny played us. All we can do is still choose the best option for ourselves and avoid allowing many other families to ruin their future.
I don't know what should be the title of this topic. But if you are already reading this. I request you to finish it.
If you are from Europe or America, I don't know how Life insurance companies work there. But as far as I know, if you have health insurance and get sick, which may cost a lot of money, your insurance company will cover it. If you have vehicle insurance and crash your car, you will get a payment to fix the car. This is my basic understanding so far. If those things are right (What I wrote so far), it's irrelevant to you, but I still recommend you read it.
I am from Bangladesh, and Life Insurance is a part of many people in this country. Bangladesh is one of the countries with the most Insurance companies in operation. People in Bangladesh are primarily religious, and over 90% are Muslim. Most old age (Over 50) people are uneducated and can barely read or write. There are a couple of Insurance companies with the tag "Islami," which refers to Islam. People trust them unthinkingly because they believe those companies are unlikely to scam anyone.
There are 36 private Life insurance companies, and 45 more are non-life. Ten of 36 are titled with Islam (that's 27%). I believe there are a hundred more companies that are not registered yet. Still, they are operating their business.
A couple of months ago, I watched a video on social media where an older woman was crying in a branch office of one of the Life insurance companies because they were not paying her[I was not able to find the video when I am writing]. Her husband was paying for life insurance for ten years, and suddenly her husband died. The woman was seeking help from the commissioner (Local political person), and that commissioner recorded the video and posted it on social media. When the commissioner asked them what the issue was and why they were not paying her, they could not answer him satisfactorily. The commissioner gave them an ultimatum to pay her, or he will shut down their office. We have not seen the updated video of this matter, but the case is pretty much the same in Bangladesh.
Hundreds of scam life insurance company employees visit rural villages and convince uneducated people to open life insurance. They offer high returns, and some companies work like MLM. They offer other people commissions if they can bring them new clients. Most uneducated people get convinced when they offer, like your money will be doubled in five years, and we will return it with interest. We wouldn't have problems if those companies kept their promises. Unfortunately, those are scams (most of them).
I can refer you to some youtube news where that television covered some news about it and interviewed those victims.
https://www.youtube.com/watch?v=imYpcqxtLaA
https://www.youtube.com/watch?v=yhObKxehcUw
https://www.youtube.com/watch?v=o4UjDhitHDo
You can see how those innocent peoples scream after losing their life savings.
What are those companies doing with the money?
I have read in newspapers that most companies are transferring their funds to a foreign bank in Switzerland because they believe it's the most secure country where nobody asks them about the source of funds. Some companies buy land and build empires with the money of innocent people. Those companies never pay those people unless they get any kind of pressure from powerful people. If you are a victim and you do not have the power to force them to give your money, you fucked up.
I will mention some news here about those scams.
Case of Delta Life Insurance
Case of Farest Islami Life Insurance:
I have never seen someone claim insurance for their vehicle in Bangladesh. I have never seen someone claiming their Life Insurance. Of course, there are some legit companies, and people maybe claim their insurance. But I haven't seen any of them IRL.
What is the Alternative?
Bitcoin could be an alternative. In Bangladesh, most people open insurance because they want to double their money after a certain period of time. There was a time when Banks offered double your money in five years scheme. But now it's eight to ten years. This is another popular method in Bangladesh which is called DPS (Deposit pension scheme). I will write about it another day. Since this is the main target, I don't think there are better options than Bitcoin. If you want something physical, buy land, and you may also consider Gold.
[1] https://www.tbsnews.net/bangladesh/corruption/idra-finds-delta-life-insurance-boards-involvement-embezzling-tk3687cr-338698
[2] https://www.thedailystar.net/news/bangladesh/crime-justice/news/audit-report-fareast-insurance-over-tk-2100cr-embezzled-2917636
Farest Scam two: https://thefinancialexpress.com.bd/stock/bangladesh/regulator-dissolves-scam-hit-fareast-lifes-board-1630550295
If you are from Europe or America, I don't know how Life insurance companies work there. But as far as I know, if you have health insurance and get sick, which may cost a lot of money, your insurance company will cover it. If you have vehicle insurance and crash your car, you will get a payment to fix the car. This is my basic understanding so far. If those things are right (What I wrote so far), it's irrelevant to you, but I still recommend you read it.
I am from Bangladesh, and Life Insurance is a part of many people in this country. Bangladesh is one of the countries with the most Insurance companies in operation. People in Bangladesh are primarily religious, and over 90% are Muslim. Most old age (Over 50) people are uneducated and can barely read or write. There are a couple of Insurance companies with the tag "Islami," which refers to Islam. People trust them unthinkingly because they believe those companies are unlikely to scam anyone.
There are 36 private Life insurance companies, and 45 more are non-life. Ten of 36 are titled with Islam (that's 27%). I believe there are a hundred more companies that are not registered yet. Still, they are operating their business.
A couple of months ago, I watched a video on social media where an older woman was crying in a branch office of one of the Life insurance companies because they were not paying her[I was not able to find the video when I am writing]. Her husband was paying for life insurance for ten years, and suddenly her husband died. The woman was seeking help from the commissioner (Local political person), and that commissioner recorded the video and posted it on social media. When the commissioner asked them what the issue was and why they were not paying her, they could not answer him satisfactorily. The commissioner gave them an ultimatum to pay her, or he will shut down their office. We have not seen the updated video of this matter, but the case is pretty much the same in Bangladesh.
Hundreds of scam life insurance company employees visit rural villages and convince uneducated people to open life insurance. They offer high returns, and some companies work like MLM. They offer other people commissions if they can bring them new clients. Most uneducated people get convinced when they offer, like your money will be doubled in five years, and we will return it with interest. We wouldn't have problems if those companies kept their promises. Unfortunately, those are scams (most of them).
I can refer you to some youtube news where that television covered some news about it and interviewed those victims.
https://www.youtube.com/watch?v=imYpcqxtLaA
https://www.youtube.com/watch?v=yhObKxehcUw
https://www.youtube.com/watch?v=o4UjDhitHDo
You can see how those innocent peoples scream after losing their life savings.
What are those companies doing with the money?
I have read in newspapers that most companies are transferring their funds to a foreign bank in Switzerland because they believe it's the most secure country where nobody asks them about the source of funds. Some companies buy land and build empires with the money of innocent people. Those companies never pay those people unless they get any kind of pressure from powerful people. If you are a victim and you do not have the power to force them to give your money, you fucked up.
I will mention some news here about those scams.
Case of Delta Life Insurance
Quote
Insurance Development and Regulatory Authority (IDRA) in an investigation has found the involvement of the Board of Directors of Delta Life Insurance Company limited (DLICL) in embezzling Tk 3,687 crore and other irregularities.
A letter signed by IDRA director (Deputy Secretary) Md. Shah Alam was sent to the secretary of Financial Institution Division (FID) on December1, 2021 in this regard.
The IDRA analyzing the provisional interim report, prepared by a charter accountant firm, revealed that management and the Board of Directors of DLICL has embezzled Tk 3,687 crore by tax evasion and money laundering.
The insurance regulator suspended the Board of Directors of Delta Life Insurance and appointed an administrator to run the company in February this year.
DLICL evaded VAT worth Tk 35.17 crore. The VAT Audit Intelligence and Investigation Directorate of the NBR filed a case under the VAT law against the company after getting evidences of the evasion through an investigation.
Earlier, a team of the VAT AIID led by its assistant director Sayma Parveen carried out the investigation based on allegations for the period between January 2013 and December 2017.
On December 17, 1986 the journey of Delta Life Insurance Company began. The company provides different types of insurance services through its array of products catering to the need of people belonging to different strata of the society.
Services included traditional insurance coverage along with savings: Ordinary Life, Gono-Grameen Bima, Group & Health Insurance.
Delta Life is conducting its operation through 1000 plus offices across the country.[1]
A letter signed by IDRA director (Deputy Secretary) Md. Shah Alam was sent to the secretary of Financial Institution Division (FID) on December1, 2021 in this regard.
The IDRA analyzing the provisional interim report, prepared by a charter accountant firm, revealed that management and the Board of Directors of DLICL has embezzled Tk 3,687 crore by tax evasion and money laundering.
The insurance regulator suspended the Board of Directors of Delta Life Insurance and appointed an administrator to run the company in February this year.
DLICL evaded VAT worth Tk 35.17 crore. The VAT Audit Intelligence and Investigation Directorate of the NBR filed a case under the VAT law against the company after getting evidences of the evasion through an investigation.
Earlier, a team of the VAT AIID led by its assistant director Sayma Parveen carried out the investigation based on allegations for the period between January 2013 and December 2017.
On December 17, 1986 the journey of Delta Life Insurance Company began. The company provides different types of insurance services through its array of products catering to the need of people belonging to different strata of the society.
Services included traditional insurance coverage along with savings: Ordinary Life, Gono-Grameen Bima, Group & Health Insurance.
Delta Life is conducting its operation through 1000 plus offices across the country.[1]
Case of Farest Islami Life Insurance:
Quote
Fareast Islami Life Insurance allowed its former chairman and directors to commit serial financial crimes and siphon off policy holders' funds worth more than Tk 2,100 crore between 2010 and 2020, found an audit recently. The audit was commissioned by the Bangladesh Securities and Exchange Commission after receiving allegations that the insurer has failed to meet customers' claims and matured policyholders' payments.
After receiving a primary audit report from A Wahab & Co. Chartered Accountants, the BSEC in August restructured the Fareast Life board by appointing 10 independent directors.
The commission already directed the Central Depository Bangladesh Ltd (CDBL) to freeze all shareholdings into Fareast Insurance and other listed companies by specific individuals, their families or entities under the control of the individuals. The directors embezzled the funds by showing manipulated prices while buying land, investing in their own companies and providing advances to fraudulent cooperatives, the special audit found.
It is evident that the procurement of land by the insurer at artificially high prices were all designed to launder corporate cash by a group of directors notably including Md Nazrul Islam, former chairman, said the BSEC in a letter to the finance ministry on November 24.
"A direct capital erosion of Tk 858 crore happened at different times over the last decade," read the letter signed off by Ripan Kumar Debnath, executive director of the BSEC.
For instance, in 2015, the insurer bought 28 decimals of land in Kakrail for Tk 172 crore from Islam's brother-in-law and father-in-law. The two had bought the land in the same year for about Tk 19.6 crore.
Islam's wife later received Tk 115 crore through bank transfer from her brother and father, the auditor found. Meanwhile, the insurer launched two cooperative societies and made advances of Tk 191 crore to the organisations, the letter said. though the books showed advances to the two cooperative societies, the money actually did not flow into their bank accounts. "Importantly, one of the cooperative societies was dissolved in 2016 and the money remained unaccounted for." The special auditor concluded that both the cooperative societies were fraudulent vehicles to launder corporate cash off the Fareast Life Insurance Company.
The insurance company's balance sheet for 2018 showed that Tk 686 crore was kept as investment in shares and bonds. A careful enquiry into the corporate books of accounts revealed that the company made term deposits with different banks, forged resolutions of the board meetings and facilitated those banks to extend loan facilities to 13 parties including sponsor-directors and their entities, the BSEC said. When all of them did not repay the loans and interests, the banks liquidated the deposits of Fareast Islami Life Insurance. These are unlawful transactions leading to laundering of cash of Fareast Insurance worth Tk 659 crore, the letter said.
Islam, Md Hemayet Ullah, the then managing director of the insurance company, and MA Khaleque, a sponsor-director, are particularly found to have actively planned and executed it and ultimately laundered corporate resources to their private gains, it said. The insurer invested Tk 369 crore as term deposits with several banks from 2013 to 2016. Khaleque borrowed Tk 312 crore against the lien of the term deposits of the company and then ultimately defaulted.
The lending banks then liquidated the corporate term deposits and an adjustment was made in the books of Fareast Islami Insurance recording Tk 421 crore as loans and investments to Khaleque. Khaleque reached an agreement with the insurer in 2018 admitting his liability of Tk 369 crore to the company, the letter said.
"It is evident that serial financial crimes and money laundering took place while Md Nazrul Islam acted as the chairman of the company," the BSEC letter said. The audit committee is an important board committee of the company; they failed to deliver the minimum oversight so an enhanced enquiry and investigation is required to identify their role in the criminal activities, it said. Management activities have a fiduciary responsibility to safeguard corporate resources but the commission gathered ample evidence that management executives actively colluded with controlling shareholders.
"It is highly likely that top-level management executives schemed out corporate resources for their private gains."
As many as four independent audit firms carried out financial audits and three others conducted corporate governance audits of the insurer from 2010 to 2019, according to the BSEC letter.
They failed to gather sufficient evidence regarding massive fraud and money laundering so they need to be held accountable for their failure.
The commission already directed the CDBL to freeze all shareholdings into Fareast Insurance and other listed companies by specific individuals, their families or entities under the control of those individuals.
"The company's board and the management did the forgery in collusion, so we could not stop them early," said Shakil Akhter, executive director of the Insurance Development Regulatory Authority and also its spokesperson.
"We usually appoint the managing director and expect the MD would inform us if any illegal demand comes from the board of directors. But, the management did not inform us. When the insurer failed to repay the insurance claim and people came to us, we found out then that the company is in trouble."
It is tough to stop corruption early until the management of the companies does not inform the IDRA, he added. The Daily Star contacted Islam, Ullah and Khaleque multiple times but none responded at the time of filing of the report last evening. "Despite the corruption, we are now paying back the claims slowly," said Mahamudhul Hasan, company secretary of Fareast Islami Life Insurance. "We knew an independent auditor audited the company's financials, and the BSEC also asked for documents to investigate. We are trying to help the BSEC in their investigation," Hasan added. Contacted, BSEC Chairman Shibli Rubayat Ul Islam said the stock market regulator's tasks is almost complete as they unearthed the corruption and informed all the related authorities. The IDRA should have unearthed the case as the primary regulator. "But they did not do it. We did it considering the benefits of shareholders, the policyholders and the whole economy. Now, the IDRA, the finance ministry and the Anti-Corruption Commission will work on it," he added.[2]
After receiving a primary audit report from A Wahab & Co. Chartered Accountants, the BSEC in August restructured the Fareast Life board by appointing 10 independent directors.
The commission already directed the Central Depository Bangladesh Ltd (CDBL) to freeze all shareholdings into Fareast Insurance and other listed companies by specific individuals, their families or entities under the control of the individuals. The directors embezzled the funds by showing manipulated prices while buying land, investing in their own companies and providing advances to fraudulent cooperatives, the special audit found.
It is evident that the procurement of land by the insurer at artificially high prices were all designed to launder corporate cash by a group of directors notably including Md Nazrul Islam, former chairman, said the BSEC in a letter to the finance ministry on November 24.
"A direct capital erosion of Tk 858 crore happened at different times over the last decade," read the letter signed off by Ripan Kumar Debnath, executive director of the BSEC.
For instance, in 2015, the insurer bought 28 decimals of land in Kakrail for Tk 172 crore from Islam's brother-in-law and father-in-law. The two had bought the land in the same year for about Tk 19.6 crore.
Islam's wife later received Tk 115 crore through bank transfer from her brother and father, the auditor found. Meanwhile, the insurer launched two cooperative societies and made advances of Tk 191 crore to the organisations, the letter said. though the books showed advances to the two cooperative societies, the money actually did not flow into their bank accounts. "Importantly, one of the cooperative societies was dissolved in 2016 and the money remained unaccounted for." The special auditor concluded that both the cooperative societies were fraudulent vehicles to launder corporate cash off the Fareast Life Insurance Company.
The insurance company's balance sheet for 2018 showed that Tk 686 crore was kept as investment in shares and bonds. A careful enquiry into the corporate books of accounts revealed that the company made term deposits with different banks, forged resolutions of the board meetings and facilitated those banks to extend loan facilities to 13 parties including sponsor-directors and their entities, the BSEC said. When all of them did not repay the loans and interests, the banks liquidated the deposits of Fareast Islami Life Insurance. These are unlawful transactions leading to laundering of cash of Fareast Insurance worth Tk 659 crore, the letter said.
Islam, Md Hemayet Ullah, the then managing director of the insurance company, and MA Khaleque, a sponsor-director, are particularly found to have actively planned and executed it and ultimately laundered corporate resources to their private gains, it said. The insurer invested Tk 369 crore as term deposits with several banks from 2013 to 2016. Khaleque borrowed Tk 312 crore against the lien of the term deposits of the company and then ultimately defaulted.
The lending banks then liquidated the corporate term deposits and an adjustment was made in the books of Fareast Islami Insurance recording Tk 421 crore as loans and investments to Khaleque. Khaleque reached an agreement with the insurer in 2018 admitting his liability of Tk 369 crore to the company, the letter said.
"It is evident that serial financial crimes and money laundering took place while Md Nazrul Islam acted as the chairman of the company," the BSEC letter said. The audit committee is an important board committee of the company; they failed to deliver the minimum oversight so an enhanced enquiry and investigation is required to identify their role in the criminal activities, it said. Management activities have a fiduciary responsibility to safeguard corporate resources but the commission gathered ample evidence that management executives actively colluded with controlling shareholders.
"It is highly likely that top-level management executives schemed out corporate resources for their private gains."
As many as four independent audit firms carried out financial audits and three others conducted corporate governance audits of the insurer from 2010 to 2019, according to the BSEC letter.
They failed to gather sufficient evidence regarding massive fraud and money laundering so they need to be held accountable for their failure.
The commission already directed the CDBL to freeze all shareholdings into Fareast Insurance and other listed companies by specific individuals, their families or entities under the control of those individuals.
"The company's board and the management did the forgery in collusion, so we could not stop them early," said Shakil Akhter, executive director of the Insurance Development Regulatory Authority and also its spokesperson.
"We usually appoint the managing director and expect the MD would inform us if any illegal demand comes from the board of directors. But, the management did not inform us. When the insurer failed to repay the insurance claim and people came to us, we found out then that the company is in trouble."
It is tough to stop corruption early until the management of the companies does not inform the IDRA, he added. The Daily Star contacted Islam, Ullah and Khaleque multiple times but none responded at the time of filing of the report last evening. "Despite the corruption, we are now paying back the claims slowly," said Mahamudhul Hasan, company secretary of Fareast Islami Life Insurance. "We knew an independent auditor audited the company's financials, and the BSEC also asked for documents to investigate. We are trying to help the BSEC in their investigation," Hasan added. Contacted, BSEC Chairman Shibli Rubayat Ul Islam said the stock market regulator's tasks is almost complete as they unearthed the corruption and informed all the related authorities. The IDRA should have unearthed the case as the primary regulator. "But they did not do it. We did it considering the benefits of shareholders, the policyholders and the whole economy. Now, the IDRA, the finance ministry and the Anti-Corruption Commission will work on it," he added.[2]
I have never seen someone claim insurance for their vehicle in Bangladesh. I have never seen someone claiming their Life Insurance. Of course, there are some legit companies, and people maybe claim their insurance. But I haven't seen any of them IRL.
What is the Alternative?
Bitcoin could be an alternative. In Bangladesh, most people open insurance because they want to double their money after a certain period of time. There was a time when Banks offered double your money in five years scheme. But now it's eight to ten years. This is another popular method in Bangladesh which is called DPS (Deposit pension scheme). I will write about it another day. Since this is the main target, I don't think there are better options than Bitcoin. If you want something physical, buy land, and you may also consider Gold.
[1] https://www.tbsnews.net/bangladesh/corruption/idra-finds-delta-life-insurance-boards-involvement-embezzling-tk3687cr-338698
[2] https://www.thedailystar.net/news/bangladesh/crime-justice/news/audit-report-fareast-insurance-over-tk-2100cr-embezzled-2917636
Farest Scam two: https://thefinancialexpress.com.bd/stock/bangladesh/regulator-dissolves-scam-hit-fareast-lifes-board-1630550295
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