Life Insurance Corporation (LIC) said on Thursday it was reviewing its risk management while asserting that its assets were not impaired by the housing finance scam involving some of its top officials. It also appointed VK Sharma,zonal manager,south zone,as the new CEO of its housing finance arm,replacing Ramachandran Nair who was arrested by the CBI for his alleged involvement in a loan racket. Sources said Sharma may take over as the CEO of LIC Housing Finance shortly. Earlier,LIC chairman TS Vijayan said the outstanding loans to the contentious real estate companies from LIC Housing Finance was Rs 380 crore,adding the asset quality of the company had not been impaired. LIC was providing all the relevant information to CBI for its investigation into the scam,he added. CBI has requested for some files (relating to loans extended to some housing companies). The outstanding amount (from) these companies was Rs 380 crore, Vijayan said. The insurer convened a board meeting to take stock of situation after the arrest of Nair and LICs secretary (investment) Naresh K Chopra. Vijayan had said the senior-most general manager at LIC Housing Finance,Chandrasekhar,would be the officiating CEO of the housing arm arm till a new chief was appointed. The process of finalising a new CEO is on and will be appointed in the next 2-3 days, he added. Nair,who had just a few years of service left,would be put under suspension till the court decided about the CBI case,sources said. LIC Housing Finance stock was down 0.98% to Rs 1,058 at the BSE on Thursday. Asked about the location of the real estate companies to which it had exposures,Vijayan said some within Mumbai and some from outside. CBI has named several real estate developers in the first report,including Mantri Realty,Kumar Developers,DB Realty,Emaar MGF and Lavasa Corporation. We will see whether the internal system needs tightening,whether risk management needs tightening and whether there was any procedural shortcomings, he said. He added LIC had already set up a team to find out at what level information about investing in terms of IPOs or FPOs were leaked. Our exposure to companies is nominal,only 11%,and majority of borrowing are at individual level and NPA quality is also good, Vijayan assured. All the parameters,team and brand for LIC HFL remain same. Hence,I dont think there will be any impact of the CBI action against LIC HFL in the functioning of the company. Of course,the sentiments will be affected for some time, he said. LIC was yet to know about the charges that have been slapped against its investment official. All I can say is lot of investments as matter of routine keep happening,involving our investment department. All our deals are relating with the stock market. Several deals do happen as we are a large investor in the market, he said.
