First Mutual Holdings disputes auditors forensic report
Staff writer
FIRST Mutual Holdings Limited (FMHL) says it is not in agreement with the findings in the BDO Chartered Accountants report and in the regulator’s Corrective Order and thus has instituted legal proceedings to protect its legal rights.
The Insurance and Pensions Commission (Ipec) last month issued an FML with an order for corrective measures to be implemented by the regulator following defiance of the law on the separation of insurance and pension businesses.
In a statement, FMHL said the order directed FML’s shareholders to pay significant sums in Zimbabwe dollars and in United States dollars to the policyholders in respect of perceived actual and potential losses, as assessed by BDO.
“FML respectfully disagrees with the findings in the BDO report and in the IPEC Corrective Order and believes its submissions were not properly considered. Interpretations of facts, accounting standards, legal and actuarial principles, as well as currency conversion issues, are in dispute.
“FML is seeking input from independent third-party professionals in a bid to resolve the areas of disagreement. Accordingly, the boards of both FML and FMHL are exploring all avenues to find a way forward,” the group said.
Meanwhile, the group said that in order to protect FML’s legal rights, an application for review of the corrective order has been filed with the High Court.
Notwithstanding the institution of legal proceedings, which has become unavoidable to safeguard FML’s rights, the group also said both FML and FMHL will continue to work with the regulator and with the parent ministry to resolve the issues.
“The Group remains committed to the service and protection of its policyholders and to balancing the interests of all stakeholders.
“As these developments may have a material effect on the price of the company’s securities, shareholders are advised to exercise caution when dealing in the company’s securities,” the group said.
In 2022, Ipec launched a forensic investigation into the affairs of FML over its failure to separate assets between shareholders and policyholders.
