The duo had sought interim order against the Insurance Board (IB) decision to take over the management of the non-life insurance company.[break]
The court´s decision to deny interim order has paved by the way for the insurance sector regulator to continue intervention at insurance company until a final verdict comes out.
The IB had taken over the management of EIC on October 10. It had also removed Chairman Rajendra Kumar Khetan and suspended CEO Kebal Krishna Shrestha.
The joint bench of Judges Shivaraj Adhikari and Baburam Regmi also directed the defendants to furnish clarifications in writing for the final hearing.
Khetan and Shrestha had filed separate writ petitions seeking interim order against the IB decision on October 23.
The IB had also decided to disqualify Khetan and his family members form holding any positions in any insurance company for five years. It had also frozen Khetan´s stake in the company.
Khetan holds 22 percent stake in EIC. Similarly, the appeal court also said there was no need of directing the Insurance Board to rollback its decision taken on October. The court was responding on separate appeals filed by CEO Shrestha and Madhusudan Agrawal - board member of EIC.
The IB took over the management of the company after the company´s management and executive board flouted multiple directions issued by it, including the one to recover claim payment of Rs 40 million made to Himalayan Snax which is promoted by the Khetans.
The EIC had released the amount to Himalayan Snax without following due procedure at a time when more than 2,300 claims were pending at the company. EIC employees say the claim amount is worth over Rs 400 million.
Meanwhile, a team led by Chartered Accountant Santos Prasai has resumed regular works of the company. Shamsher Rokka, an employee at the company, said they were happy to return to work following IB intervention.
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