Massive Explosion at Jagdamba Steel Company, Reinsured by Himalayan Re

Kathmandu – A powerful explosion at the main furnace of Jagdamba Steel, a flagship company under the Shankar Group, has caused damage reportedly worth millions of rupees, prompting serious questions over the insurance and reinsurance arrangements tied to the incident.

The explosion occurred late Wednesday night at the plant, sending shockwaves across Nepal’s steel and insurance sectors. While there were no immediate reports of casualties, industrial equipment and infrastructure have suffered extensive losses.

According to industry sources, the damaged furnace was insured by The Oriental Insurance Company, which had reinsured the risk through Himalayan Reinsurance Company—a firm that itself counts Shankar Group as one of its major investors.

This arrangement has drawn sharp scrutiny from the Nepal Insurance Authority, as it appears to violate a fundamental regulatory principle that prohibits insurance and reinsurance arrangements between companies with mutual ownership. The Authority has launched a formal investigation to determine how such a conflict-of-interest scenario was allowed.

The incident has also stirred deeper controversy. Himalayan Reinsurance has recently come under criticism for allegedly delaying or denying claims from other steel manufacturers facing similar furnace-related accidents. When approached for comment regarding the claim and the reinsurance structure, Himalayan Reinsurance CEO Upasana Poudel declined to respond.