Media is pointing entirely towards LIC for the downfall of Stock Markets during the past few days. Campaign is going on as if the safety of policyholders' money with LIC is under threat and LIC is amidst a mega scam. What is really happening?
There were some wrongdoings happened at LIC HFL. LIC didn't refuse it and took firm actions immediately. New Chief Executive (Mr.V.K.Sharma) has been appointed and the necessary actions on the culprits were assured according to the staff regulations apart from the actions from the side of CBI and other agencies. What is worth to highlight here is the swift of action of the LIC Management. All actions have been taken on the very next day and the Chairman of LIC visited and explained the safe position of LIC to the Finance Ministry. Is any other Public Sector or Government organisation having the guts to call for a Board Meeting in less than a day's time and take this much firm actions? That shows the strength of the LIC! And that strength itself made the supporters of private sector afraid of LIC and to cry as if there is a mega scam!
LIC HFL is one of the very large number of Companies in which LIC has invested. The difference here is that LIC is the promoter. That's all! So the argument that any wrong doing at LIC HFL is at LIC itself is baseless and purposeful.
The money at LIC HFL is still safe even though there were some wrongdoings! Yes, the percentage of NPA (Non-Performing Assets or for easy understanding those loans could not be recovered) is at 0.84% in the case of retail sector, that is loans given to individuals! Actually it is accused as some fraud has taken place under Corporate Segment. But the NPA under corporate portfolio is at 0.08% much lower than that of the individual portfolio of LIC HFL itself and very much lower than the industry average!! (Source: Businessline)
Secretary Investments of LIC was also arrested, so what happened on the part of LIC?
Go through the lines from DNA:
The Economic Offences Wing (EOW) of the Central Bureau of Investigation (CBI) suspect that price sensitive information was leaked about block deals entered into by the Life Insurance Corporation (LIC) involving at least eight of the beneficiary companies named in the FIR of the multi-crore housing loan scam.
Block deal is defined as a single transaction of a share lot of five lakh shares or of Rs5 crore, said an expert.
Explaining the modus operandi employed by the suspects, CBI sources revealed that the planning about block investment made by LIC in the particular stock would be leaked by Naresh Chopra, secretary (Investment), LIC, to Rajesh Sharma of Money Matters (India) Pvt Ltd.
“The investment plans of the companies are meant to be kept secret as it involves the company’s strategic investment of the shareholder’s money,” a source said.
Sharma, who was in close contact with Chopra, would then selectively pass on this price sensitive information to other market participants.
As the news of LIC, the single-largest insurance company, investing in these firms reaches the market, the value of their shares would increase and that would lead to huge profits in the stock market. “We have enough proof to back our claims,” said a senior CBI officer. (Source: DNA)
That's why the Chairman of LIC told that the housing finance racket involved only individual officers who will be taken care of by the CBI and LIC is VERY STRONG! "Scam means somebody is misusing money... somebody is losing money... these are false schemes. It is proven that they (arrested by the CBI) are individuals who are charged by CBI. That (legal procedure) will take its own course", he added! (Source : ET)
Nothing more than that and all the others are rumors!
Explain to all!!