Crisis in Co-operative Insurance Board

A crisis of good governance at the Co-Operative Insurance PLC Board of Directors has led to an ugly litigation process.

The company, owned by numerous multi-purpose co-operative societies, banks and thrift societies, had informed the Colombo Stock Exchange of an incident on 31 August some directors allegedly holding an impute board meeting.

At this meeting they have made and entered into some decisions with regard to the envisaged change of directors, present chairman and change of company secretary which have a significant impact over the corporate governance of the company in adherence with Companies Act No. 7 of 2007 and listing rules of the CSE.

Cooperative Insurance Company PLC Managing Director and CEO Udaya Kumara in a filing to the CSE said to prevent any potential negative impact on the company’s stability and good governance, the present Chairman S.S. Weerasekara filed a court case bearing no: CHE/37/2022/CO in the Commercial High Court (civil) of Colombo against directors seeking an interim relief/preventing the execution of the decisions made at aforesaid impute meeting.

In order to maintain the good governance of the company, the court issued an interim order averting directors who have held the such aforementioned impute meeting from calling another meeting afterwards and suspending the decisions which were taken at the said meeting.

“As the senior management of the company we will assure that we would take every possible action to safeguard the interests of our shareholders,” Kumara added.

Following the announcement by the company, CSE yesterday lifted the trading halt imposed on the shares of Cooperative Insurance effective since 6 September.

The Board of Directors comprises K.S.S. Weerasekera, Vice Chairman D.L. Samarawickrama, Chandana Prasad Jayasinghe, A.D.T.S. Palitha, D. Thilakawardena, A.B. Senadira, P.B. Jayarathna and K.R.W. Ranasinghe.

In December 2021, Cooperative Insurance became a Quoted public company, subsequent to its Initial Public Offering (IPO), which was oversubscribed in the first few hours of issue opening, attracting Rs. 600.3 million in capitalisation.

Cooperative Insurance in FY21 reported a Gross Written Premium of Rs. 5.3 billion up from Rs. 5.1 billion in the previous year. Pre-tax profit amounted to Rs. 933 million, marginally down from Rs. 940 million in FY20. 

After tax profit rose from Rs. 695 million to Rs. 810 million. Total assets rose to Rs. 9.8 billion from Rs. 7.9 billion at Company level and to Rs. 13 billion from Rs. 10.8 billion at Group level. Liabilities at Company level amounted to Rs. 5.18 billion at end 2021 and Rs. 7.77 billion at Group level. The Group has 1,567 employees and 100 branches countrywide.