Kathmandu. KATHMANDU: Asian Life Insurance Company (LIC) has canceled the process of purchasing undistributed right shares of City Hotels.
The company’s communication came after the news was published in the Insurance News that Asian Life had raised the shares of City Hotel in violation of the Act. Chief Executive Officer (CEO) of the company, Dinesh Lal Shrestha, was found to have bought double the number of shares of City Hotels against the authority given by the Board of Directors.
Asian Life buys shares of its own founder’s company in violation of Insurance Act
The Board of Directors of Asian Life Insurance has decided to authorize CEO Shrestha to buy up to 1 million units of undistributed right shares of any listed public limited company. CEO Shrestha had bought 20 lakh units of undistributed shares of City Hotels through bidding.
NEA seeks clarification from Asian Life Insurance on share purchase of City Hotels
On Sunday, the board of directors of the company had submitted a decision to purchase 10 lakh units of shares by accepting different amounts through different applications. All three applications included the same language and minutes of the decision of the Board of Directors on July 25, 2002.
Out of the total 21,50,418 units of undistributed shares of City Hotels, Asian Life Company has acquired 20 lakh units. The company had quoted the highest price to buy the shares.
Asian Life buys shares of its own founder’s company in violation of Insurance Act
Insurance Khabar had published the news about this arbitrary case of Asian Life exceeding the authority given by the Board of Directors. After this, the regulator of Nepal Insurance Authority had also sought clarification on this matter.
Currently, Asian Life has sent a letter to Prabhu Capital asking them to cancel the share allotment process of City Hotels and return the money. This case highlights the poor corporate governance of Asian Life.
