RBS in soup for handing out bonuses illegally

KATHMANDU:

Rastriya Beema Sansthan has run into trouble with the anti-graft authority for making unauthorised distribution of bonuses to the staff and indiscreetly handing out performance allowances to appease the employees’ unions.

RBS is yet to get its financials since fiscal 2006-07 but has distributed among the employees Rs 27.25 million as bonus from the profit for those years. Besides, the audited balance sheets of fiscals 2003-04 to 2005-06 have not been approved by the regulator — Insurance Board. The company has also not held its annual general meeting for the past decade. A corporate body can only issue bonus and dividend provided the shareholders endorse the distribution during the AGM. In addition, the regulator also needs to approve the dividend. Moreover, distribution of additional bonus as prize to all the employees annually is also against the regulation.

Commission for Abuse of Authority has summoned RBS administrator and two finance chiefs looking after the company’s life and non-life businesses seeking clarification for the bonus distribution.

“CIAA summoned top management yesterday and questioned why they distributed the bonuses to the employees without getting the balance sheets audited and approved,” informed a senior official of the insurance company.

Moreover, all the staffers of the state-owned insurance company have been receiving a month’s salary every year as reward for “superior performance”.

“CIAA had been objecting to the distribution for the past couple of years and demanding that the company recover the amount distributed as prize allowance. It has asked the company to get back the money thus doled out,” claimed the official.

The decision allowing RBS to award the best performing employees was taken by the Cabinet in 1994. However, it did not say each employee was entitled to the reward. The amount distributed since then till last year stands at about Rs 100 million, an RBS source told THT.

In August, the employees’ union prevented administrator Ram Bahadur Khadka and deputy administrators from entering the office demanding that the company provide them with additional medical benefits of

Rs 500,000 and additional retirement benefits.

The constant employees’ disruptions have affected the company’s plan to split its life and non-life businesses. RBS was asked to separate the two businesses in 1995 after Rastriya Beema Sansthan Act was revised. Due to its inability to get its balance sheets audited or separate the two businesses, Insurance Board has not renewed its insurer’s license for more than a decade.

Pampered staff

• As many as 160 employees of RBS receive salary for 23 months annually, including regular salaries, allowances and bonuses

• This year RBS board and executives approved distribution of up to Rs 1,000 per month as telephone allowance

• The staff can also avail of loan up to Rs 3.5 million at near zero interest rate

Source: THT