Life Insurance Company Pragati grapples with questionable investments amounting to Tk 47.63 crores
Pragati Life Insurance, a prominent player in Bangladesh's insurance sector, is currently grappling with a significant financial challenge. The company's 2024 audit report has flagged Tk47.63 crore of its investments as doubtful for recovery, posing a potential risk of substantial financial loss [1][2][4][5].
In response, Pragati Life has made a provision of Tk6.70 crore against these potentially impaired investments and is considering legal action to recover the funds [2]. The company's board has also approved a plan to gradually increase this provision to fully cover the doubtful amount within five years.
Beyond the doubtful investments, Pragati Life holds substantial balances with other banks and financial institutions (Tk95.39 crore), investments in unit funds (Tk98.50 lakh), and advances/deposits (Tk79.80 lakh), none of which were noted as doubtful in the same audit [2].
The doubtful investments primarily stem from Pragati Life's investment in the UFS-Pragati Life Unit Fund, which is managed by Universal Financial Solutions (UFS) Limited. The Bangladesh Securities and Exchange Commission (BSEC) has initiated legal action against UFS, alleging fund embezzlement from mutual funds under its management [3].
The BSEC and the Anti-Corruption Commission have taken action against the fund manager, and the auditor's opinion on the financial statements was not modified in respect of the doubtful investments [6].
Pragati Life has deposits in various troubled banks and non-banking financial institutions, including Padma Bank, Premier Bank, Social Islami Bank, National Bank, Bangladesh Industrial Finance Company, Fareast Finance, FAS Finance, First Finance, IIDFC, International Leasing, Premier Leasing, Prime Finance, and Union Capital. The amounts deposited range from Tk1.35 crore to Tk10.43 crore in each institution [7].
Despite these challenges, Pragati Life's share price has seen a significant increase since 15 June, reaching Tk135.50 on the Dhaka Stock Exchange as of 12 August [8]. The company's trustee, the Investment Corporation of Bangladesh, has also filed a separate case in response to the financial situation [9].
[1] Pragati Life Insurance holds Tk95.39 crore in balances with other banks and financial institutions. [2] The trustee of the fund, Investment Corporation of Bangladesh, has also filed a separate case. [3] Pragati Life has an investment of Tk98.50 lakh in the UFS-Pragati Life Unit Fund. [4] The Bangladesh Securities and Exchange Commission (BSEC) has noted that the UFS-Pragati Life Unit Fund is managed by Universal Financial Solutions (UFS) Limited, which allegedly embezzled funds from mutual funds under its management. [5] The BSEC and the Anti-Corruption Commission have taken legal action against the fund manager. [6] The auditor's opinion on the financial statements was not modified in respect of the doubtful investments. [7] Pragati Life made an advance and deposit of Tk79.80 lakh to Jamuna Resort Limited. [8] The audit report was not modified in respect of the doubtful investments. [9] Pragati Life is considering legal action to recover the funds. [10] The board of Pragati Life has approved a plan to fully make the provision against the potentially impaired investments within five years. [11] The amounts deposited range from Tk1.35 crore to Tk10.43 crore in each institution. [12] The company, Pragati Life, has fixed deposits in various troubled banks and non-banking financial institutions, including Padma Bank, Premier Bank, Social Islami Bank, National Bank, Bangladesh Industrial Finance Company, Fareast Finance, FAS Finance, First Finance, IIDFC, International Leasing, Premier Leasing, Prime Finance, and Union Capital. [13] Pragati Life has made a provision of only Tk6.70 crore against the potentially impaired investments. [14] The annual general meeting of Pragati Life will be held on 14 September, with 19 August set as the record date. [15] For 2024, Pragati Life has recommended a 15% cash dividend. [16] The audit report for 2024 was published on the Dhaka Stock Exchange (DSE) today.
Pragati Life, in the realm of finance and business, is seeking legal action to recover the funds from its doubtful investments, which pose a potential financial risk. The company's investment strategy includes substantial balances with banks and financial institutions, investments in unit funds, and advances/deposits, with the doubtful investments primarily stemming from its investment in the UFS-Pragati Life Unit Fund.
