Allegations of Improper Premium Approvals by Regulatory Authorities Spark Investigation

The spokesperson on behalf of the general investors Mr. Tilak Koirala has exposed an investigation of apparent misconduct and misuse of authority by key figures. The investigation, undertaken in accordance with Section 45 of the Insurance Act 2079, has uncovered acts of corruption related to the issuance of shares at premiums by prominent officials, including Ramesh Kumar Hamal, Chairman of the Securities Board of Nepal; Mukti Nath Shrestha, Executive Director; Surya Prasad Silwal, Chairman of the Nepal Insurance Authority; Raju Raman Poudel, Executive Director; and other involved individuals.

The misconduct extends to the issuance of letters of understanding that have allowed several insurance companies, namely Citizen Life, Sun Nepal Life, IME Life, Reliance Life, and four others, to demand amounts exceeding the registered share value from the general public. Such actions not only contravene the law but also reflect an abuse of authority.

Moreover, the investigation has uncovered irregularities, particularly in the demands for amounts surpassing the registered share value from the public in comparison to the Himalayan Re-Insurance Company. In response to these findings, stringent legal actions will be initiated against those involved in these illicit activities. The objectives of these actions are to rectify past transgressions, prevent future wrongdoing, and ensure that those found guilty face the full extent of the law, as prescribed by existing legislation.

Key Highlights:

Misuse of Authority: The investigation implicates Chairman Ramesh Kumar Hamal, Executive Director Mukti Nath Shrestha of SEBON, Chairman Surya Prasad Silwal, Executive Director Raju Raman Poudel of Nepal Insurance Authority, and any other parties found to be involved in the abuse of authority under Section 45 of the Insurance Act 2079.

Suspension of IPO Process: To stop the entire IPO process initiated in 2077, releasing the "Book Building Methodology," which allows insurance companies to determine the premium value for their shares only as per the law's requirements. This suspension allows for a comprehensive investigation into alleged misconduct and policy-driven corruption in premium setting, including irregularities associated with companies such as Ghorahi Cement.

Comprehensive Scrutiny: To conduct a meticulous examination of the issuance of operation permits (licenses) and IPO approvals for the insurance companies implicated. This scrutiny encompasses a review of all pertinent decisions, documents, correspondence, and communications involving the companies, sales managers, underwriters, retired agencies, the Nepal Insurance Authority, and SEBON.

Establishment of Inquiry Commission: To address allegations of misuse of authority or actions that violate the law, the Akhtiyar Durupayog Anusandhan Aayog will conduct thorough investigations, and individuals found responsible will be subject to legal consequences. Furthermore, those who have filed complaints regarding these actions can expect a prompt and impartial hearing.

This critical revelation has been duly notified to the Office of the Prime Minister and Council of Ministers at Singha Durbar, the Ministry of Finance, Singha Durbar, Kathmandu, and the Finance Committee of the House of Representatives.