New Delhi: The government is considering a plan to redraw the list of prospective candidates for the post of chairman of India’s biggest life insurer as some of the contenders are still to be cleared by the Central Vigilance Commission (CVC), which investigates graft charges against government employees.
State-owned Life Insurance Corp. of India (LIC) has had two interim chairmen since the government denied T.S. Vijayan an extension to his five-year tenure after the CVC objected.
Vijayan’s tenure as chairman expired on 2 May though he is due to retire after two years.
The government, which initially planned to await CVC clearances for the candidates, is considering if it should leave out from the shortlist those still awaiting the commission’s nod and include new candidates in their place, a government official said requesting anonymity.
A second option is to call all the eligible candidates for interviews irrespective of whether they have been cleared by the CVC, the official said.
“If we leave out candidates who have not got a CVC clearance, we are denying candidates because there are pending cases against them,” said the official. “On the other hand, if we call them for interviews, it could create problems as CVC clearance is (a) must for the appointment.”
After denying an extension to Vijayan, the government appointed Rakesh Singh, additional secretary in the department of financial services at the ministry of finance, as the interim chairman. It later named D.K. Mehrotra, a managing director of LIC, the interim chairman for three months and extended his tenure for another three months on 26 August as it was unable to complete the selection process.
An LIC spokesperson declined to comment.
“A final decision has not been taken. We have asked the CVC to give us in writing what is the present status and how much time it will take them for the final report. As it is, we have waited for quite some time”, the official said. “If they say it’s going to take a longer period of time then we may have to redraw the zone of consideration.”
Five candidates may be short-listed for interviews for the chairman’s post.
Candidates in the fray include Vijayan, Mehrotra and another LIC managing director Thomas Mathew. The government is awaiting CVC clearance for Vijayan and Mathew.
Vijayan could not be reached for comments despite calls to his office and mobile phone. Mathew did not respond to an email.
“It is taking the government a long time to finalize the candidate. But to be fair, they are trying to ensure that they pick the right candidate and the process is controversy free,” said an analyst with a consulting firm.
Vijayan, who joined LIC as a direct recruit officer in 1977, became its youngest chairman in 2006 after being promoted from a managing director in charge of marketing. Vijayan continues to hold the position of a managing director at LIC.
LIC, which has an asset base of about Rs 12 trillion, has been in the middle of a controversy after questions were raised about its investment practices and weak risk management systems.
A three-member panel constituted by the finance ministry is scrutinizing all investments made by LIC in 2007-08 and 2008-09.
The finance ministry is closely looking at the exposure of LIC’s subsidiary, LIC Mutual Fund Asset Management Co. Ltd, to liquid and money market schemes that led to a loss of Rs 120 crore in the first six months of fiscal 2011.
LIC even saw two of its officials being arrested in the bribe for loan scam last year. The Central Bureau of Investigation arrested LIC Housing Finance chief executive R.R. Nair and LIC’s secretary (investment) Naresh Chopra for allegedly accepting bribes to facilitate corporate loans and leaking insider information on the insurer’s investments, respectively.