Kathmandu. Serious questions have been raised about the efficiency and intention of Nepal Insurance Authority (NEA) Managing Director Sushil Dev Subedi for cornering the shares of the government-owned Nepal Reinsurance Company.
Subedi has also implicated the then chairman of NEA, Madan Dahal, in course of supporting interest groups to get promotion to the post of executive director by surpassing senior officials. Subedi’s irresponsible act has raised questions about the regulatory capacity of the NRA.
More than Rs 4 billion of the insurance fund deposited by the insured in Himalayan Life Insurance is at risk due to the recommendation made by Subedi.
After the compulsory retirement of Executive Director Raju Raman Poudel, Subedi has been working as the Executive Director before being promoted to the post of Executive Director. He has the full right to check whether every policy decision made by the Authority is in accordance with the law and to stop or express dissent when the decision is illegal. However, he has put the entire insurance sector in jeopardy by supporting interest groups in policy decisions in order to promote more qualified directors on the basis of performance, decision-making ability, appointment, work experience, research, and international level training.
Madan Dahal, joint secretary at the Insurance Authority, who has been deputed to the Insurance Authority as a part-timer in addition to his regular responsibility at the Ministry of Finance, was unaware that Himalayan Reinsurance Company was ‘cornering’ in the purchase of shares of Nepal Reinsurance Company. Because he seems to have given time to both the Ministry of Finance and the NRA, he has given only a limited amount of time to the NRA’s work.
}
However, he was fully aware that Sulav Agrawal, promoter of Himalayan Life Insurance, and Deepak Bhatta, entrepreneur of Himalayan Life Insurance, had bought the shares of Nepal Reinsurance Company in a planned manner. He was also aware why the then chairman Surya Prasad Sil TAG_OPEN_em_26 TAG_OPEN_strong_25 wal had allowed Himalayan Life to invest Rs 2 billion in the share market only for the purpose TAG_CLOSE_strong_25 TAG_CLOSE_em_26 of purchasing shares without insurance. Despite this, he repeatedly approved the purchase of shares through the then chairman Dahal in violation of the decision taken during the tenure of former chairman Silwal with the intention of gaining promotion under the influence of interest groups.
The comment submitted by Subedi during Dahal’s tenure regarding the approval granted to Himalayan Life to buy the shares of Nepal Reinsurance Company has not included the details of how many shares of Himalayan Life Company owned in Nepal Reinsurance Company. In the commentary, Himalayan Life has only disclosed how much money has been invested in which sectors.
In a statement submitted to the Department of Money Laundering Investigation, Dahal has justified his decision by citing the provision of Insurance Act, 2079 BS that allows the insurance company to hold up to 15 percent share in a licensed insurer for different types of transactions.
In the directive related to investment of life insurers, the authority has set a limit of 15 percent on the promoter or ordinary shares of any company. This limit has been gradually increased from 5 percent to 15 percent.
Managing Director of Insurance Authority Subedi claimed that he had recommended Himalayan Life Insurance to buy shares of Nepal Reinsurance Company as per the Insurance Act, Regulations and Directives. “I am ready to respond to any authority,” he said, adding, “I am ready to face legal punishment if I have committed any wrongdoing.” ’
In the directive related to investment of life insurers, the authority has set a limit of 15 percent on the promoter or ordinary shares of any company. This limit has been gradually increased from 5 percent to 15 percent. It is clear that Dahal was unaware of the provision that Silwal was not allowed to invest in the shares of Nepal Reinsurance Company when Dahal gave permission to invest in the shares of Nepal Reinsurance Company on the recommendation of Subedi.
