Life Insurance

Make ITC, Finance Ministry & SEBI Parties In PIL Against LIC Investment In Tobacco Giant ITC: Bombay HC

The Bombay High Court has directed petitioners of a PIL opposing the idea of the Life Insurance Corporation of India holding one-third equity stake in tobacco giant ITC, to implead the Union Ministry of Finance, ITC, Ministry of Industries and Commerce and SEBI as respondents.

The petitioners are a group of seven people, two of them being members of Tata Trusts, R Venkatramanan and Lakshman Sethuraman.

Venkatramanan is the managing trustee of the Sir Dorabji Tata Trust and is responsible for management and oversight of all Tata Trusts, including the trust that runs the Tata Memorial Hospital.

One of the petitioners is Sumitra Pednekar, wife of former state home minister Satish Pednekar who died of throat cancer.

Counsel for the petitioners, senior advocate Venkatesh Dhond, submitted before a bench of Chief Justice Manjula Chellur and Justice GS Kulkarni that while, the Union and state governments are taking efforts to promote anti-tobacco warnings and discourage people from smoking, the state-run LIC is investing in a company which derives majority of its revenue from sale of cigarettes. This is contrary to the government’s efforts to eradicate the use of tobacco, Dhond said.

When asked why this PIL was not filed earlier as LIC has been investing in ITC since 1972, Dhond said his clients noticed the issue once the government sold 2 per cent of its stake in ITC to LIC last year.

According to the PIL, LIC owns a total of 32 per cent stake in ITC through five other state-run insurance companies and the Unit Trust of India.

ITC derives 80 per cent of its revenue from cigarettes, thus the PIL states that LIC, which has sold life insurance to millions of Indians, should not have any stake in it.

The matter will now come up for hearing in eight weeks.

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