Government demotes LIC Chairman Vijayan to MD

MUMBAI: TS Vijayan, the chairman of Life Insurance Corporation of India , has been demoted to the position of managing director following a cash-for loans scam which engulfed the corporation's investment department in November last year.

This is for the first time that any Chairman of LIC has been asked to work as a managing director. Rakesh Singh, an additional secretary in the financial services department of the finance ministry, has been appointed as the acting chairman.

Vijayan's demotion comes within weeks of the finance ministry setting up a committee led by former deputy governor of the Reserve Bank of India (RBI) Vepa Kamesam to probe the investments made by the LIC in the last three years. The committee is expected to make recommendations on the governance standards and investment guidelines of India's largest financial institutions. The LIC's investment corpus is worth 9 lakh crore.

A LIC source said Vijayan may resign from the corporation following the snub by the finance ministry and he will take a decision soon whether to continue as MD for the next two years or not. Sources say the finance ministry led by Pranab Mukherjee is taking a strict view of the cash-for-loan scam which broke our in LIC last November. The CBI had arrested LIC Housing CEO RR Nair for approving loans after taking bribes.

Apart from Nair, those arrested were Naresh K Chopra, Secretary (Investment), LIC, R N Tayal, General Manager of Bank of India (Delhi), Maninder Singh Johar, Director (Chartered Accountant) of Central Bank of India , Venkoba Gujjal and Dy General Manager of Punjab National Bank (Delhi). Rajesh Sharma, CMD of Mumbai-based firm Money Matters Ltd and two of its employees -- Suresh Gattani and Sanjay Sharma-- were among those arrested.

The CBI had alleged that bank officials colluded with the firm to sanction large scale corporate loans, overriding mandatory conditions for such approvals along with other irregularities.

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Cong blames Sanjay

The Congress has severely criticised Sanjay Gandhi's coercive family planning experiment during the Emergency - calling it arbitrary and authoritarian.

The party has made it's view official by putting it down in a book to mark it's 125th anniversary.

For decades, Congress has preferred caution while discussing its Sanjay Gandhi years even though the Gandhi scion was roundly criticised for several of his policies.

It was his family planning policy of getting men forcibly sterilized that earned him the title of an autocrat.

For the first time ever, the congress has decided to break its silence on the issue. The book called 'The Congress and the making of the Indian nation' has Finance Minister Pranab Mukherjee as its chief editor.

Released on the occasion of its 125 years celebration, it says," Over enthusiasm led to compulsion in enforcement of programmes like compulsory sterilisation and clearance of slums."

"Sanjay promoted slum clearance, anti dowry measures and promotion of literacy...but in an arbitrary and authoritarian manner. This led to much to the annoyance of the popular opinion."

While Congress never misses a chance to speak of Rajiv Gandhi's legacy, it has so far consistently steered clear of discussing or mentioning Sanjay Gandhi. His son Varun's decision to join the BJP made that silence more intense.

Interestingly in its 125th year, the party has made another departure by even including a chapter on Narasimha Rao in the book - a PM who has usually been the party's favourite fall guy.

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