The Life Insurance Corporation (LIC) of India told the Delhi High Court on Tuesday that it will not take any steps till August 30 towards its proposed acquisition of 51 per cent stake in the Industrial Development Bank of India (IDBI). The oral assurance by the LIC was given before Justice Vibhu Bakhru as he appeared inclined to pass orders restraining the state-run insurance company from making any investment in the IDBI in which the government intends to dilute its shareholding below 51 per cent.
"You (LIC) will not present us with a fait accompli," the court said after which Additional Solicitor General Maninder Acharya, appearing for the Centre and the LIC, urged that no order be passed and the matter be listed for hearing on August 30 as till then nothing will happen. The ASG also sought time to file an affidavit indicating the reasons behind the government and LIC's decision.
The court gave LIC time till August 30 to file the affidavit in which the insurance company was asked to also indicate its Board's minutes of meeting and agenda papers pertaining to the proposed investment in the IDBI. The order came on a plea moved by the All India IDBI Officers Association which has challenged the LIC's move to acquire 51 per cent stake in the bank.
In their plea moved through advocates, Prashant Bhushan and Pranav Sachdeva, the association has said that the change in shareholding could take away the public sector bank status of the IDBI which in turn could affect their employment conditions.
The petition also claims that the change in shareholding was not in public interest as it "exposes the investments made by the public in the IDBI and corrodes the ability of the LIC to pay back its policy holders since it will have to invest an amount of Rs 13,000 crore to acquire the 51 per cent stake".
"Further they said acquisition is not a financially prudent decision for the LIC given the fact that IDBI Bank Ltd has gross non-performing assets amounting to a whopping Rs 55,588.26 crore. "The said investment will be made from the funds of 38 crore policy holders of the LIC who have invested their hard earned money to secure their own futures. The said investment made by the LIC will adversely hamper its own abilities to pay its insurance holders," the petition has said.