October 15, 2011 1:59:33 am
The reply to a recent RTI filed by NGO Voices of Tobacco Victims (VoTV) has brought to fore the large share of investments made by the Life Insurance Corporation of India (LIC) in tobacco companies such as Indian Tobacco Company (ITC),VST Industries and Dharampal Satyapal Ltd (DS Ltd).
As per the reply,LIC held 99,58,91,658 equity shares in ITC as of March 31,2011,which has almost doubled from 51,11,04,115 shares in March 2009. The current book value of these shares is around Rs 3,500 crore.
LIC also has equity shares in VST Industries and debenture shares in Dharampal Satyapal Ltd with book values of around Rs 15 lakh and Rs 50 crore respectively.
As a member of the civil society and an anti-tobacco activist,I am confused. The government spends around Rs 10,000 crore for treatment of tobacco-related diseases and here they are investing Rs 3,500 crore in a cigarette manufacturer. They are contradicting their own policies, said Dr Pankaj Chaturvedi,associate professor at the Tata Memorial Hospital,who also works with VoTV.
LIC has a 12.72 per cent stake in the total public shares of ITC,second to the 26.66 per cent shares of Tobacco Manufacturers (India) Ltd.
With the government spending so much to tackle tobacco usage over the past few years,one would expect a phasing out of the LIC shares from ITC. However,the number of shares have only drastically increased in the past two years, said Chaturvedi.
VoTV has also questioned why LIC does not charge higher premium charges from tobacco users.
LIC officials,however,dismissed all insinuations of social irresponsibility.ITC is not a just a tobacco company anymore. A major portion of their revenue is from fast-moving consumer goods. Also,it is a major company in the stock exchange market. Similarly,DS Ltd is also a salt manufacturer, said Vipin Anand,LICs executive director (corporate communications). The NGO has over read into facts and unfairly singled us out. We have an extremely clean track record and have constantly participated in social causes, said Anand.
Unconvinced,VoTV has taken the matter ahead and written to the Health Ministry and the Insurance Regulatory and Development Authority of India to address the issue.
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