The High Court has declared illegal the insurance regulator's appointment of administrator in Bangladesh's biggest private life insurer, Delta, and also ordered its previous board to be reinstated.
The Insurance Development and Regulatory Authority (IDRA) earlier had appointed administrator to the Delta Life firm on allegations of evasion of taxes and not settling claims of the policyholders.
Sources say in appointing administrator in February in 2021 the IDRA held the view that it would protect policyholders' interests.
The VAT Audit, Intelligence and Investigation Directorate filed a case against the Delta management under the VAT Act on a charge that it had evaded paying Tk 351.8 million in VAT.
Former IDRA member Sultan-ul-Abedin Mollah was the first administrator put in the company to administer its operations.
A High Court bench comprising Justice Khasruzzaman and Justice Md Mahmud Hassan Talukder passed the orders Thursday that overturned the government authorities' action in management change.
The writ petitioner challenged the insurance regulator's moves on the company's board suspension, administrator appointment for four months, and time extension for the administrator.
"The previous board of directors was restored through the High Court judgment," says a press statement issued from Delta Life.
In February last year, the regulator suspended the insurer's board by citing irregularities, and appointed a former IDRA member as administrator for four months.
The ousted entrepreneurs went to the HC against the regulatory action. They also filed an anti-corruption case against IDRA Chairman Dr M Mosharraf Hossain charging him with demanding bribes.
Later, the IDRA changed administrators in the company twice.
However, in the meantime, the financial institutions division (FID) of the Ministry of Finance (MoF) brokered a closed-door meeting between IDRA high-ups and the Delta Board during the first week of January. FID secretary Sheikh Mohammad Salim Ullah organised the meeting.
Details of the meeting were not available despite repeated attempts by this scribe to reach those who had attended the meeting.
Sources in the insurance sector, however, said that the meeting resolved the standoff between the IDRA and the Delta Life Board.
Meanwhile, reports say, there have been more instances of company board changes and installing administrators or interim boards to run operations in the interregnum on various allegations.