RUDRA PANGENI

KATHMANDU, Dec 22: It has been revealed that Himalayan Snax and Noodles (HSN) received insurance payment worth Rs 60 million from Everest Insurance Company (EIC) without paying even a penny as insurance premium.

 Industrialist Rajendra Khetan was the chairman of both the companies when the payment was made.

 A study report submitted by an advisory board at the EIC, deployed by the Insurance Board (IB), concluded that Khetan committed financial fraud. The board led by Suraj Bikram Shahi also recommended the insurance regulator to recover the amount from Khetan and HSN.

 Fire had engulfed Kavre-based factory of HSN on Jul 11, 2011.

 IB officials said they will recover the amount as per the board´s decision and forward the case to Crime Investigation Bureau (CIB) of Nepal Police.

 IB has also deployed a separate management team led by its chartered accountant Santos Prasai at the EIC.

 The report shows HSN received insurance payment worth around Rs 60 million on different non-life insurance policies.

 According to the report, payment of Rs 40 million made to to HSN as an advance payment on fire insurance claim was against the Insurance Act. The report also showed insurance policies had been issued on credit and that policy buyer had not cleared premium of the previous year.

 HSN also drew Rs 19.7 million for different insurance claims between 2006 and 2011 from EIC without paying any premium.

 The report has recommended IB to recover all the illegal payment made to HSN along with accrued interest.

 In the case of advance payment on fire insurance claim, the report clearly states that there was no need to settle the claim as policy buyer had not paid any premium.
 The insurance contract automatically becomes void if premium is not paid.

 

Khetan was also the member of Constituent Assembly I.

 The IB team took reins of EIC, which had remained shut for around 13 months, in October by dissolving the non-life insurer´s board. It stopped transfer of shares held by board members and Khetan family members and disqualified Chairman Khetan to chair any insurance company for five years.

 Khetan has 7 percent stake in EIC.

 Earlier, IB had asked the Khetan and HSN to pay back advance payment received as fire insurance claim saying that payment was made without fulfilling due procedure. It had also suspended EIC´s fire portfolio until the payment was recovered.

 However, Khetan and HSN flouted the directive and threatened to close down the company.

 The management team deployed by the IB has been settling pending claims. It has restored all business of the non-life insurer.

 CIB arrested Kebal Krishna Shrestha, the suspended CEO of EIC, two weeks ago on the charge of misappropriating over Rs 25 million from the company. Anil Dhungel, assistant general manager of the company, who was charged with being an accomplice into the crime, was arrested a week ago.

 Khetan couldn´t be reached for comment despite repeated attempts.