HC asks govt to explain failure to probe IDRA chief’s alleged graft

The High Court has asked four government agencies to explain why they failed to investigate the corruption allegations against the chief of the Insurance Development & Regulatory Authority (IDRA).

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A High Court bench of Justice M Enayetur Rahim and Justice Md Mostafizur Rahman issued the rule on Tuesday on a writ petition filed on October 28 by Abu Saleh Mohammad Amin Mehedi.

The finance ministry, the Anti-Corruption Commission (ACC), the National Board of Revenue, and the Bangladesh Financial Intelligence Unit were made respondents to the rule.

Concrete evidence was found that IDRA Chairman M Mosharraf Hossain invested around Tk 4 crore using the gratuity and the provident funds of the two companies, namely Loves & Lives Organics, and Gulshan Valley Agro Industries, said the petition.

The four funds are still active in both the primary and secondary markets of the capital market, and a portion of the funds was invested in Padma Islami Life Insurance as of September 30 last year.

Recently, all four funds applied for and were allotted shares in the initial public offering of Sena Kalyan Insurance Company, said the petition.

The two companies are stated to be non-operative in their income tax returns. Yet, the funds together hold an investment portfolio of Tk 4 crore built over the past two to three years.

In order for the employees' funds to have such an extent of investment, which is comprised of the contributions from employees and employers, the total salary bill of the two firms ought to be Tk 33 crore over the past two years.

The companies also ought to have earned revenue that justifies their contribution to the funds. "This is not possible for the companies that are stated to be non-operative," said the petition.

The more likely scenario is that the two companies and their four funds are being used by Mosharraf Hossain as a conduit for laundering money obtained through corruption, it said.

The bank accounts of the companies bear no evidence of periodic and regular contributions to the funds.

Hence, the transactions are proof of corruption, it added.

This was not the first time the IDRA chairman is facing corruption allegations.

In December, Delta Life Insurance complained to the ACC against the IDRA chief for demanding Tk 50 lakh in bribes to give approval for the reappointment of the company's chief executive officer and renewal of the actuarial valuation basis.

The IDRA also appointed an administrator in Delta Life Insurance in February, saying it was needed to protect policyholders' interests and unearth breaches of rules that came to light following special and investigative audits into the insurer.

The VAT Audit, Intelligence and Investigation Directorate of the NBR has filed a case against Delta for evading Tk 35.18 crore in value-added tax.

Hossain could not be reached for comments.