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| Policy holders' money safe in LIC | | | Early Times Report
JAMMU, Feb 4: LIC Employees and officers of Jammu & Kashmir under the banner of Northern Zone Insurance Employees' Association Srinagar Division and LIC CLASS-1 Federation held a meeting today on 4th of February 2023 in the leadership of Pawan gupta and Fayaz Ahmad Gul, Divisional Secretary and President Northern Zone Insurance Employees' Association Srinagar Division; and Com Vijay Khajuria and Jatinder Bhat- Secretary and President of Class-1 Federation to discuss the effect of Hindenburg report on LIC. Com. Rajesh Gupta, Raj Kumar Sharma-Jt. Secretaries, Dinesh Kumar Sharma-Vice President, Rajesh Kumar- Treasurer, Mohan Lal and Raj Kumar were also present in the meeting. The meeting said that ever since US based short seller Hindenburg Research published a damning report on the Adani group of companies, a large section of the people and political parties have expressed their concern over the LIC's presumably high exposure to the Adani group of companies and how it could risk the savings of middle class Indians. Being responsible trade unions commanding the support of an overwhelming majority of the workforce in LIC and committed to promoting the interest of the policy holders and the people at large, we wish to clarify our position on the issue. We are opposed to political patronage to any business group at the cost of public sector, the people and the economy. We feel that the government should conduct an impartial enquiry into the allegations made by the Hindenburg Report and find out the truth. On the issue of LIC's exposure to the Adani group of companies and its potential impact on the hard earned savings of millions of Indians, we would like to place that LIC is a long term investor and the investment decisions are taken keeping the long term benefits of the policy holders in mind.
Since LIC is a statutory body created under an act of Parliament, all its investment decisions are subject to parliamentary scrutiny and regulatory supervision. Moreover, LIC has an investment board and the decisions on investment are taken by the board after thorough scrutiny.
The investment policy of LIC is that 80% of its investments are made in secured instruments like government securities or bonds. Hardly 20% of the investments are made in equities. The funds invested by the policy holders are therefore absolutely safe. Regarding the investment in the Adani group and the supposed loss to LIC, we have to clarify that this loss is only notional and not real. LIC has not sold any Adani group shares held by it in the market to sustain any loss. LIC has already clarified through its Press Statement dated 30th January 2023 that against the total investment of Rs.36,474.78 crore in the Adani group companies, the present market value stands at Rs. 56, 142 crore. Thus LIC has earned a notional profit of almost Rs.20,000 crore on its investment in the Adani group.
However, the profit is as notional as is the presumed loss. Every year, LIC generates an investible surplus of around Rs.4.5 to Rs.5 lakh crore. A part of this money has to be prudently invested in blue chip companies to give returns to the policy holders. This cannot be kept idle. In the case of the Adani group, the total exposure is only about 7% of the total equity investments done. It is to be noted that while LIC holds 3.91% of the aggregate market capitalization of the Adani group of companies, its holdings in the Tata and Reliance group of companies are much higher at 3.98% and 6.45% respectively. |
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