Kathmandu. It has been revealed that more than 100 former and current employees of Japan-based Prudential Life Insurance Company were involved in swindling customers of billions of rupees. The company revealed that they duped a total of 500 customers of 3.10 billion Japanese yen (about Rs 2.85 billion).
It is a Japanese subsidiary of American Insurance Co. The company has announced that it will step down as CEO next month to take responsibility for the fraud.
In June 2024, a former employee of the company was arrested for alleged fraudulent activities. After the arrest, other cases of wrongdoing, including fraudulent investment requests, surfaced. That prompted the company to launch further internal investigations in August of that year.
Last year, after another former employee was arrested on suspicion of leaking clients’ personal information, Japan’s financial services agency ordered the company to submit a report with measures to prevent a repeat of fraud involving former employees.
During the investigation, the company confirmed that three former employees were involved in misappropriation of funds related to Prudential Life’s systems and insurance business while working. They duped eight customers of about 6 million yen (about Rs 5.526 million) by misleading them into believing that the insurance money was part of a business transaction. Some of these frauds date back to 2017.
The company also discovered that 106 of its current and former employees were involved in other fraudulent activities related to its insurance business. This included soliciting investment products related to the company’s insurance business or obtaining personal loans from customers. As a result of these actions, 498 customers were found to have been defrauded totalling about 3 billion yen.
The firm said it was working to compensate affected customers and was cooperating with police on litigation. Prudential Life said: “Incidents where employees have taken advantage of their close relationship with customers may be due to a lack of proper oversight by management. Which failed to mark such activities. ’
In addition, according to the company, a high-performance-related compensation system can create an environment focused on financial gain and increase the risk of wrongdoing by creating income instability in its sales staff.
Prudential Life CEO and chairman Kan Mbara will step down on February 1 to take responsibility for the incident. He will be replaced by Hiromitsu Tokumaru, the current chairman and CEO of Prudential Gibraltar Financial Life Insurance, a group company of Prudential Life. –Agency
