House panel calls for inquiry into LIC’s ONGC share buy
“The Committee would recommend the Insurance Regulatory and Development Authority (Irda) should enquire into the issue and investigate as to whether LIC has violated any prudent investment norms and exceeded the limit stipulated by them,” the Parliamentary Standing Committee on finance has said in a report tabled on Tuesday.
Expressing their disapproval over the manner in which ONGC’s disinvestment was carried out, the panel headed by former finance minister Yashwant Sinha has called it mere financial engineering that was aimed at shifting money from the pocket of the exchequer to another.
The government raised Rs 12,767 crore last month through a five per cent share auction in state-owned oil explorer ONGC, where Life Insurance Corporation of India was a major subscriber. While ONGC share sale was subscribed 98.3 per cent, LIC had picked up over 84 per cent of the shares on offer.
Subsequently, LIC’s stake in ONGC has gone up to 9.48 per cent. As per the Irda norms, insurers cannot hold more than 10 per cent stake in any company.
Disinvestment secretary Mohammed Haleem Khan had, however, tried to dispel the view that LIC was called in to bail out the issue.
“How can LIC agree to invest Rs 12,000 crore based on one phone call? I don’t think LIC is so
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