The board of LIC Housing Finance is scheduled to meet on 29th November to assess the situation following the arrest of its CEO by CBI on charge of bribery and to approve the appointment of a new Chief Executive.
The new CEO is expected to be appointed in a day or two.
Mr V.K. Sharma, Zonal Manager, Chennai, is tipped to be the front runner for the post. Other people in the fray include Mr T. Chattopadhyay, ED Marketing; Mr S. Roy Chowdhury, Zonal Manager of the Western Zone; and Mr A. K. Sahoo, Executive Director in charge of bancassurance and alternate channels. Mr Chattopadhyay and Mr Roy Chowdhury are the senior most officers but have less than two years for retirement.
Arrested
On 24th, LIC Housing Finance's Director and Chief Executive, Mr R.R. Nair, was arrested for allegedly accepting bribe from Money Matters, a Mumbai based finance company for approving loans to developers.
“Since LIC is the major shareholder in the housing finance company with more than 36 per cent stake, the new chief will be from LIC. However, LIC will have to inform the other shareholders like GIC about its decision,” said a LIC official.
Mr T.S. Vijayan, Chairman, LIC, said the corporation will appoint one of its Executive Directors as head of LIC HF in a few days.
Till then, a team of general managers at the housing finance company will be in charge of the day to day operations, with Mr Chandrasekaran, the senior most GM, as the acting chief, he said.
Besides Mr Nair, Mr Naresh Chopra, Secretary (Investments) at LIC was also arrested on charges of receiving bribe for revealing insider information regarding LIC's investments.
Mr Vijayan said that according to the policy of the corporation, the two arrested officials would be suspended if they are in police custody for more than two days.
He said the insurance company is reviewing its risk management system to plug any possible loopholes. He said that there was no systemic failure and the asset quality of the housing finance company has not been impaired.
The CBI has sought two files from LIC about certain transactions amounting to about Rs 380 crore.
The Finance Ministry has also asked for the details in the case, Mr Vijayan said.
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