HC stays IDRA move to suspend Sonali Life Board Directors

High Court symbol

The High Court Division of the Supreme Court has stayed for six months the Insurance Development and Regulatory Authority’s (IDRA) decision to suspend the Board of Directors of Sonali Life Insurance and appoint an administrator to run the company.

At the same time, the court issued a rule asking the respondents to show causes why the IDRA’s action should not be declared illegal.

IDRA’s Chairman and its Director (Law), Sonali Life Insurance and its administrator have been made respondents to the rule which is returnable in four weeks.

The apex court bench of Justice Naima Haider and Justice Kazi Zinat Hoque issued the order and rule on April 22 following a writ petition filed by Quazi Moniruzzaman, Chairman of the Board of Directors of Sonali Life Insurance, challenging the legality of IDRA's decision for suspending the Board of Directors and appointing the administrator.

There is no legal bar for the Board of Directors chaired by Quazi Moniruzzaman to run the Sonali Life Insurance and the administrator cannot perform any function for the company following the HC's stay order, writ petitioner's lawyer Ahsanul Karim told the media people on Tuesday.

Meanwhile, Zahangir Alam, spokesperson of IDRA, told The Daily Star that they will move an

appeal before the Appellate Division of the Supreme Court challenging the High Court order.

The IDRA on April 21 has appointed Brig Gen (retired) SM Ferdous as administrator of Sonali Life Insurance with immediate effect. Following the appointment, the board of directors of the company was suspended.

The administrator was appointed two weeks after an audit found Sonali Life's former chairman Mostafa Golam Quddus and six of his family members, who were also directors in the company, were involved in embezzling around Tk 187.84 crore from the company.

The IDRA conducted the audit after receiving an intelligence report from a government agency.

The IDRA appointed audit firm Hoda Vasi Chowdhury and Company on December 31 last year to investigate 17 claims of irregularities, including over the appointment of Quddus as Chairman in 2023.

The audit found that Quddus and his six-family member embezzled funds in different ways, including by issuing shares for themselves, making illegal payment to companies owned by Quddus, and paying salaries to his family member directors.

Established in 2013, Sonali Life has 204 branches with 26,693 agents across the country, according to IDRA data. – Special Correspondent