Sonar Bangla Insurance faces Tk9.07cr audit anomalies

Auditors say discrepancies mostly linked to subsidiary Sonar Bangla Capital Management

Independent auditors have identified financial irregularities involving nearly Tk9.07 crore in the 2025 financial statements of Sonar Bangla Insurance Limited and its subsidiaries.

The findings raise concerns over the accuracy of the company’s reported investments, taxes, accrued interest, advances, and operating expenses.

The discrepancies were disclosed in the company’s audited financial statements for the year ending 31 December 2025.

Among the irregularities, the audit revealed that Sonar Bangla Insurance took out a Tk4.95 crore loan against a 90% lien on 18 fixed deposit receipts (FDRs) with Islami Bank Bangladesh PLC.

Consequently, the company failed to recognise any accrued interest on those FDRs in its financial accounts.

However, the bank statement showed accrued interest of Tk17.79 lakh, leading the auditors to conclude that the company’s assets were understated by the same amount.

Most of the irregularities were identified in the accounts of subsidiary Sonar Bangla Capital Management Limited.

According to the audit report, the subsidiary failed to maintain a proper fixed asset register for property, plant and equipment worth Tk1.13 crore.

The auditors also raised concerns over the accounting treatment of share investments. The company adjusted an unrealised loss of Tk43 lakh from the previous year against share investments of Tk1.83 crore in the current year’s accounts and recognised an additional unrealised loss of Tk27.43 lakh during the year.

The auditors said charging the prior year’s unrealised loss to the current year’s income statement overstated the reported loss by Tk43 lakh.

The audit also found inconsistencies in the advance income tax account.

While the closing balance for 2024 was Tk1.98 crore, the opening balance for 2025 was recorded at Tk2.03 crore, leaving an unexplained difference of Tk4.61 lakh. No supporting documents were provided to justify the discrepancy, the auditors said.

Questions were also raised over the “Advance to Security House” account. Although the financial statements showed a balance of Tk3.85 crore, the company wrote off Tk2.58 crore as a loss during the year.

However, the corresponding investment portfolio indicated an actual balance of only Tk33,700.

The auditors further identified discrepancies in accrued interest on FDRs. Based on their calculations, accrued interest should have been Tk18.05 lakh, compared with Tk24.19 lakh reported in the financial statements, resulting in an overstatement of Tk6.14 lakh.

They were also unable to verify Tk1.51 lakh payable to clients and Tk5 lakh in subscription payable because of insufficient supporting documentation.

The report noted inadequate documentation for several operating expenses, including Tk8.99 lakh in salaries and allowances, Tk1.21 lakh in IT and telephone expenses, Tk4.92 lakh in repairs and maintenance, and Tk8 lakh in miscellaneous expenses.

The auditors also drew attention to adjustments involving two fire insurance claims and one marine cargo insurance claim that were offset against premium income.

Another discrepancy was found in unpaid dividends. While the company reported Tk18.74 lakh as unclaimed or unpaid dividends at the end of the year, the designated bank account held only Tk16.90 lakh, leaving an unexplained shortfall of Tk1.84 lakh.

According to the auditors, the balance of the unclaimed dividend account should have matched the balance in the corresponding bank account.