Was ex LIC chief Kumar a scapegoat in Adani muddle?

Mumbai: Even as there has been a change of guard at the top at Life Insurance Corporation of India (LIC), the India’s insurance behemoth and the largest investor in the capital market in the country, sources say that there ‘strong reason’ behind such a sudden development.

MR Kumar, whose two year-long tenure as LIC Chairman ended on March 13, hanged up his boots on the same day, paving the way for his successor Siddhartha Mohanty to take over the charge the following day. In fact, there lies no room for doubt as it all happened as per the central government’s notification. It simply means that Kumar’s second extension was supposed to end on March 13 only.

Now, there seems to a twist in the story. An official from Department of Financial Services (DFS), while interacting with a section of media on the sidelines of an event in Mumbai sometime back, had revealed that Kumar was all set to get his third extension for three months or until June, by the government.

Secondly, any senior official at LIC is normally asked by the government to serve until the month-end of the retiring month. Then why was Kumar deprived of that opportunity and asked to go on March 13 itself?

Further, as per existing rules, a person can serve as LIC Chairman until age of 62. Sometime back, the central government amended the LIC Act, allowing an official to serve as the LIC Chairperson till he or she turns 62. By that yardstick, Kumar had time until June when he turns 62. Then, has Kumar been showed the exit door hurriedly?

A source familiar with the development told Bizz Buzz that Kumar was made a scapegoat in the Adani muddle.

Diversified conglomerate Adani Group founded by billionaire Gautam Adani landed in trouble and shares of group’s companies nosedived sharply after US based short seller Hindenrburg Research released a damaging report on January 24, accusing the Ahmedabad-based group of stock manipulation and brazen fraud. Being the country’s largest stock market investor, LIC has a significant exposure to Adani Group companies. LIC itself had clarified towards January-end that it had invested Rs36,474.78 crore so far in the group through both equity and debt.

Though most of these investments in the group had been made much before Kumar had taken over as the LIC Chairperson, he had to bear the grudge of the hue and cry being made in the media trial. Opposition parties including Indian National Congress, also made LIC’s investments in Adani Group companies a big political issue.

While interacting with media few days ago to declare the quarterly financial result of the corporation, Kumar had said that Adani Group’s key officials had been asked by LIC to give a presentation about their business and the media news making the rounds in the market. In the presentation, the Adani group officials were successful in convincing LIC about their fair deal. Not only that, LIC had made some money in the Adani investment, which was very much within the IRDAI permitted limit, once the stocks started appreciating in March after having dipped since the Hindenburg report came out in the last week of January.