New Delhi: Retirement fund manager EPFO’s trustees on Tuesday approved a proposal to resume investment in the scam-hit LIC Housing Finance, a subsidiary of the country’s largest insurance company Life Insurance Corp.
The decision to resume investment in the LIC Housing Finance was taken at the meeting of the Central Board of Trustees (CBT), the apex decision-making body of the Employees’ Provident Fund Organisation (EPFO).
The CBT had suspended investment in housing finance company following disclosure of the bribe-for-loans scam in November 2010 in which top officials of the LIC Housing Finance were allegedly involved.
“Amount invested in LIC Housing Finance is not much...approved investment is only about Rs 800 crore,” CBT member and secretary All India Trade Union Congress D.L. Sachdev told reporters after the CBT meeting.
The EPFO had invested Rs 454 crore in the bonds of LIC Housing Finance Company. The fund manager’s prevailing investment norms allow for investment of up to Rs 846 crore in the company.
The EPFO’s advisory body, the Finance and Investment Committee (FIC), took up the issue in its meeting on 28 January and recommended resumption of investment in LIC Housing Finance.
LIC Housing Finance went through a bad phase after CBI in November arrested its CEO Ramachandran Nair and seven other senior bankers for allegedly colluding with real estate firms to sanction large-scale corporate loans, overriding the mandatory due diligence involved in such approvals, besides other irregularities.