Zim Now Writer
Uncertainty hangs over First Mutual Life Assurance Company and its investors after the Insurance and Pensions Commission issued a “Corrective Order” demanding substantial payments to policyholders.
The order, based on a forensic audit by BDO Chartered Accountants, has sparked a legal battle that could significantly impact the company’s future.
IPEC Demands “Significant Sums” from Shareholders
Following an asset separation exercise initiated by IPEC itself, the Commission launched a forensic investigation into FML. The resulting Corrective Order, based on BDO’s findings, directs FML’s shareholders to pay “significant sums” in both Zimbabwe dollars and US dollars to policyholders. These sums are based on BDO's assessment of “perceived actual and potential losses”.
FML Disputes Findings, Seeks Independent Review
FML vehemently disagrees with the BDO report and the IPEC order. “Interpretations of fact, accounting standards, legal and actuarial principles, as well as currency conversion issues are in dispute,” the company stated. FML is seeking independent expert opinions to challenge BDO’s conclusions and is “exploring all avenues” to find an amicable solution.
Legal Action Launched, Shareholders Urged to Exercise Caution
However, in a move that throws the situation into further uncertainty, FML has filed an application with the High Court to review the Corrective Order. While both FML and its parent company, First Mutual Holdings Limited, maintain a commitment to working with regulators and the government, the legal challenge signals a potentially protracted battle.
Investors are understandably wary, with the company advising them to “exercise caution when dealing in the Company’s securities”. The potential impact on the company’s financial health and future operations remains unclear.
High Court Ruling and Ongoing Negotiations Key to Resolution
The coming months will be crucial for FML and its stakeholders. The High Court’s ruling on the review application and the ongoing negotiations between the company and regulators hold the key to resolving this complex situation. Until then, investors face an anxious wait, with the company's future hanging in the balance.
Rutendo MazhinduZim Now ReporterThe much-anticipated Mbudzi Interchange project, a significant infrastructure development aimed at easing traffic congestion in Harare, is nearing completion. As of n..
ZimbabweZIFA Congress members snubbed his freebies and now he attacks his rivalsOscar J JekeZim Now WriterTemba Mliswa has come out to move for the elimination of all viable rivals in the Zimbabwe Football ..
ZimbabwePhilemon JambayaZim Now EditorIn a bid to recover outstanding debts, the Bulawayo City Council has taken the drastic measure of cutting off water supplies to 59 schools in the city. This move has sp..
Zimbabwe
Leave Comments