Kathmandu. Asian Life Insurance Company (AILIC) has announced the election schedule to select a six-member board of directors, challenging the provisions of the Insurance Act 2079 BS. The insurance company’s election committee has also selected the provisions of the Companies Act 2063 BS.
According to a public notice signed by Election Officer Ratna Sundar Khuju on Monday afternoon, TAG_OPEN_a_49 a total of TAG_CLOSE_a_49 five directors will be selected through the election process. Another independent director will be selected by the General Assembly on the proposal of the Board of Directors. In this way, the board of directors of the insurance company will have only six members.
According to Section 47 of the Insurance Act 2079 BS, there will be at least five directors, including an independent director, on the board of directors of the insurer and a maximum of seven directors. Section 86 of the Companies Act, 2063 provides that the board of directors should have a large number of members and there should be a minimum of three to a maximum of 11 members.
Asian Life’s election committee is preparing to form a large number of board of directors, ignoring the provisions of both the Insurance Act and the Companies Act.
Apart from this, the election schedule for the formation of the board of directors has been announced to deprive the ordinary shareholders of proper representation on the basis of the share structure maintained in the company.
According to the election notice published on the company’s website on Monday afternoon, a total of five candidates including three from the founding group and two from the general shareholders will be nominated for the election.
According to the election schedule signed by Returning Officer Ratna Sundar Khuju, only three members from Group ‘A’ representing the founding group and two from Group ‘B’ representing the general shareholders will be elected.
The founders own 51 per cent and the general shareholders 49 per cent in Asian Life Insurance. In terms of this ratio, the insurance company should select a total of seven-member board of directors, including three each from both the founder and the general public and one independent director.
A total of 6-member board of directors?
According to the provision of Section 86 of the Companies Act 2063, a board of directors of 3, 5, 7, 9 or 11 members should be formed. The Companies Act does not envisage a pair of board of directors.
Asian Life Insurance’s returning officer has announced the election schedule of only five candidates. Asian Life will have a six-member board of directors when the elected board of directors selects another independent director.
There is a practice of forming a large number of board of directors to make it easier to take a decision on the basis of a clear majority in case there is a difference of opinion among the members on any issue proposed in the meeting of the board of directors.
According to the Act, at least one person should be appointed as independent directors if there are up to seven directors and at least two people if there are more than seven directors.
The functions, duties and powers of an independent director will be the same as that of any other director. In this way, the founder group will get a majority of three members on the board of directors, including two from the founder group and one more independent director appointed by the shareholders of the founder group.
Disobeying authority’s instructions:
Nepal Insurance Authority (INSURANCEA) has issued a circular in the name of insurers and directed them to compulsorily represent shares in proportion to share ownership in the board of directors after insurance companies did not make proper representation in the board of directors. it was.
शेयर रेसियो अनुसार संचालकको प्रतिनिधित्व गराउन ८ कम्पनीलाई बीमा समितिको निर्देशन
Despite the provisions of the Companies Act and the directives of the AUTHORITY, Asian Life is denying representation to three shareholders from the general group. The election schedule has been announced with only two representatives. (See election information)
Nominations for candidacy will have to be filed by 1:00 pm on July 15.
The board of directors of Asian Life is going to be re-elected for the next four years as the term of the office-bearers elected for a four-year term is coming to an end.
The election committee has made a provision to pay a fee of Rs 10,000 for the list of shareholders (voters). Ordinary shareholders complain that this fee is unnatural and expensive.
