Seven Life Insurance companies and fifteen Non-Life Insurance companies but zero AGM for FY 74/75; what are the stakeholders losing here?

~Rishab Agrawal

An Annual General Meeting (AGM) of the company is an important event as it is the only event where the shareholders of the company meet the executives and directors of the company and have an opportunity to scrutinize and discuss the activities and issues occurred in the previous year. Not only that, the shareholders of the company have the authority to vote against a decision of the executives and to amend or change it. By not convening the AGM on time, the companies are depriving the shareholders of this and other important rights.

A particular sector that has been guilty for this in the past and still hasn’t bothered to acknowledge this, is the Life and Non-Life Insurance sector. This sector has a history of delaying AGM as per their will. To get a clear picture about this matter, a list has been compiled that includes the date of AGM of the listed insurance companies for the previous year. In total there are 18 licensed life insurance companies and 20 non-life insurance companies. Out of them only, 7 life insurance and 15 non-life insurance companies are listed in NEPSE.

Looking at the Life Insurance sector, none of the companies have proposed AGM date for FY 74/75 or declared dividend for the fiscal year. Moreover, 3 companies i.e. Gurans Life Insurance (GLICL), Life Insurance Corporation (LICN) and National Life Insurance (NLICL) have not conducted their AGM for FY 73/74 although all have declared dividends for that year. Life Insurance companies had convened their AGM for FY 73/74 between the period of March and July.

Coming to Non-Life Insurance sector, for FY 73/74, the companies convened their AGM between the periods of September and June. There was only one company that defaulted in the previous year i.e. Rastriya Beema Company Limited (RBCL). But currently the situation has worsened. For FY 74/75, Non-Life Insurance companies have neither proposed the AGM date, nor have they declared any dividends yet.

While Life Insurance companies can hide behind the excuse of Actuarial Evaluation for the delay in the AGM, Non-Life Insurance companies do not have that relief. On inquiring about the matter with the officials of some of the companies, they were not able to give an appropriate reason for this delay or give a timeframe within which the company will be convening the AGM.

Looking at the facts and the past record of the sector, it wouldn’t be wrong to state that the stakeholder of the sector can expect this sort of delay for not only this fiscal year but also for the ones to come. This sector has a repeated history of bending the rules in this regard as they deem fit. However, it has not been enough for the authorities to acknowledge the fact and take action regarding the same. Such transpirations makes the securities market look weak and hampers the growth of the market. If this continues, the confidence of the investors in the market will fall to a point from where it cannot be recovered. It is time that the concern authorities acknowledge the facts and use their authority to fulfill their responsibilities.