Invested in ITC to improve returns of policyholders: LIC response to PIL

Insurer wants PIL rejected, says investments are routine, there is no rule banning them

Life Insurance Corporation (LIC) said on Friday that it has been investing in cigarette maker ITC with the bonafide objective of enhancing returns for its policyholders, investors and in the interest of public welfare.

LIC, state insurers and the Centre have been dragged to the Bombay High Court because of a public interest litigation (PIL) that questioned the government's investment in ITC and other tobacco companies.

While denying any contradictions with the government's tobacco control policies, LIC, in its affidavit, has said that there is no regulation banning investment in ITC. LIC has said investments made in ITC are through a secondary market that are routine in nature. The insurer has sought the petition's dismissal.

Public sector insurance companies and Specified Undertaking of United Trust of India (SUUTI) hold 32 per cent stake in ITC.

Sumitra Pednekar, wife of former home minister Satish Pednekar, Dr Pankaj Chaturvedi, a surgeon at Tata Memorial Hospital and R Venkataramanan, managing trustee, Tata Trusts (in his individual capacity) filed a PIL in April against the government's investment in tobacco companies.

Their main plea is that the government holding in ITC violates its own tobacco control policies. The government stake is held through public sector insurance companies.

The high court made the Securities and Exchange Board of India (Sebi) a party to the petition in the same month.

The stock market regulator, however, has sought to distance itself from the issue. In its affidavit that was filed on Friday, Sebi said that petitioners have neither prayed for any relief against it nor alleged its involvement in the share ownership.

Sebi is a body functioning in the interest of investors and is responsible for regulating deals in the securities market, said the regulator, adding that no issue has been raised in the PIL against it. "Sebi is neither a necessary nor a proper party for the present proceeding," it said and requested the court to exclude it from list of respondents.