The Ministry of Finance has directed the government-owned Rastriya Jeevan Beema Company Limited to complete the audit of the past eight fiscal years within the next four months.
According to the Nepal Insurance Authority, the sector’s regulatory body, the company has completed its annual audit only up to the fiscal year 2015/16. Due to the lack of an audit, the company’s capital increase plan has been unable to move forward.
During a discussion with officials from Rastriya Jeevan Beema Company Limited at the Ministry of Finance, Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel instructed the company to complete the long-pending audit work within four months. The ministry also stated that Minister Poudel instructed the company to hold its annual general meeting only after completing the audits for the remaining fiscal years.
The meeting, which was attended by officials from the Office of the Auditor General and the Nepal Insurance Authority, saw Finance Minister Poudel urging officials from relevant bodies to provide the necessary support to complete the remaining audit work for the company.
The lack of audits has hindered the company’s progress in implementing the capital increase plan that has been in effect in the insurance sector since 2017. The company’s current paid-up capital is only Rs 181 million. However, as per the directives from the Insurance Authority, life insurance companies are required to increase their paid-up capital to Rs 5 billion.
The authority also directed the company to sell 30 percent of its shares to the public while maintaining a paid-up capital of Rs 5 billion. The company had proposed raising Rs 3.32 billion through rights shares from its existing promoter shareholders.
After establishing a paid-up capital of Rs 3.5 billion through the issuance of rights shares to promoters, the company plans to issue shares to the general public to raise the remaining Rs 1.5 billion. The company is now preparing to issue these shares at a premium price. Since it is a government-owned company, a decision from the government is also required for this step. According to Sambharaj Lamichhane, head of the Authority's legal department, the company will move forward with its capital increase plan after receiving the government’s approval.
Previously operated as the Rastriya Beema Sansthan, the company was converted into a private entity following the enactment of the Act to Amend and Consolidate Insurance Laws, which came into effect on October 9, 2022. On November 4, 2023 the Authority gave prior approval to Rastriya Beema Sansthan to complete its transition into a company.
