The government on Friday accepted the resignation of Life Insurance Corporation, chairman SK Roy three days before his three-month notice period was to end on September 20. Managing director VK Sharma has been given additional charge as chairman of the Corporation.
Roy had unexpectedly put in his papers on June 20 this year without assigning any reasons. The government had then said there was “no pressure” on Roy to resign two years before completing his tenure and promised to get a new chairman “quickly”.
“The government has given me chairman’s charge till further orders,” Sharma told The Indian Express. “Roy completed his notice period and his resignation was accepted by the government,” he said.
It is for the first time in the history of LIC that its chairman is leaving the office without completing the full tenure. Earlier, GN Bajpai had left his post as the LIC chairman after he was appointed as the chairman of the Securities and Exchange Board of India.
After TS Vijayan’s tenure as LIC chairman ended in 2011, he continued as the MD for some time. However, he quit the job and later became the chairman of the Insurance Regulatory and Development Authority. The exit of Vijayan from LIC and his subsequent return after being relieved as the chairman of the IRDA took place during the tenure of two successive finance ministers — Pranab Mukherjee and P Chidambaram in the UPA regime.
Sharma had a stint as the MD of LIC Housing Finance before taking over as managing director of LIC. While Usha Sanwan is the other MD, the two other posts of managing directors continue to be vacant. This appointment process is likely to be expedited, sources said.
With a estimated total investment of Rs 20,00,000 crore, LIC is the country’s single largest financial institution. LIC invests close to Rs 60,000 crore in the stock markets every year. “There is a perception that LIC holds substantial shares in PSU banks which have eroded in value significantly. There is also reports of pressure on LIC to invest in tier I bonds of PSU banks to bail them out,” said an insurance sector source.