What halted Delta Life's board meeting again
Delta Life Insurance, which was supposed to hold its board meeting on 11 April to adopt its three consecutive years' financial statements, postponed it on Sunday, according to the Dhaka Stock Exchange (DSE).
The premier bourse has already asked for the specific reasons behind the postponement of the scheduled meeting, as the development is making shareholders wait even longer.
"Here emerged a procedural complexity and we explained it to the stock exchange today," said Miltan Bepari, an additional managing director and the chief financial officer (CFO) at Delta Life.
The issue concentrates within the recent resignation of the company's audit committee chairman who is an independent director.
Sakib Aziz Chowdhury, an independent director at Delta Life's court-approved board, after his resignation on personal grounds, was to be replaced by a new independent director Khondaker Sabbir Mohammad Kabir.
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The company applied to the Insurance Development and Regulatory Authority (IDRA), Bangladesh Securities and Exchange Commission (BSEC) and the Financial Institutions Division of the Ministry of Finance for approval of the change in its board, according to Miltan Bepari.
However, since the board was formed out of a ministry-mediated and court- approved agreement between the parties involved, the regulator asked the company to ensure the Supreme Court nod in the proposed change.
Meanwhile, the three-week vacation at the Supreme Court started on Sunday, said Miltan Bepari, adding that the board meeting was likely to be held after the vacation as the company's lawyer was instructed to move for the court approval.
A crucial board seat
The court-approved board of Delta Life had two independent directors — Hafiz Ahmed Mazumder who is the chairman of the board, and Sakib Aziz Chowdhury who recently resigned before the finalisation of the accounts.
Independent directors are not shareholders of a company, but serve the board as its members to protect shareholders' interest.
Chowdhury's resignation was crucial since he was the chairman of the company's audit committee that okays financial statements.
Without the audit committee chairman, the financial statements' adoption was not possible, said Bepari.
Corporate Governance Code demands the audit committee chairman to be an independent director, whereas it prohibits the board chairman in the audit committee.
That was why without appointing a new independent director, financial statements' adoption was not possible.
The long waiting of shareholders
The scheduled meeting was set to review the company's financial statements and recommend dividends for 2019, 2020, and 2021 together.
Shareholders of the country's maiden private sector life insurer have neither got any dividend nor the financial statements since 2019.
The delay was caused by the company's tussle with the Idra as it was not approving the actuarial valuation basis for 2019, and later in March 2021, the regulator suspended Delta Life board and appointed an administrator to run the company.
"Under the administrator, we could not arrange any board meeting as the regulator kept the board of directors suspended for 19 months," said Miltan Bepari.
The emergency ended in September last year through the court-mediated withdrawal of the administrator and handing over the company's board to a group of sponsors, shareholders, and independent directors.
The pending board meeting was called as soon as the company secured court approval to hold a delayed annual general meeting of shareholders.
Delta Life faced a decline in its annual premium income due to the pandemic in 2020 and bounced back in 2021, according to its unaudited figures reported to the Idra.
However, even under the administrator, the company's premium income increased to Tk763 crore in 2021 to surpass that in the pre-pandemic year. Meanwhile, the total life insurance fund of the company dropped to Tk3,954 crore at the end of 2021, from Tk4,120 crore at the end of 2020, according to the unaudited data the company submitted to Idra.
Share price falls
Delta Life shares, having a face value of Tk10 apiece, soared to Tk158 last week with the hope of multi-year dividends and the postponement of the meeting dragged it to Tk143 on Sunday in the DSE. It ranged between Tk62 and Tk232 in the last three years.
