Life Insurance Corpor-ation of India (LIC) invested heavily in Indian Tobacco Company (ITC) and other tobacco companies, including smokeless tobacco during the year 2011, a RTI by the Voluntary Association of India (VHAI) has revealed.
According to the VHAI these investments are against the spirit of World Health Organisation’s Framework Convention on Tobacco Control (FCTC), the first ever global public health treaty negotiated under the UN, which India ratified way back in 2003.
The RTI disclosed that the number of equity shares held by LIC in ITC Ltd was around 99.58 crores which have a book value of `3561 crores approximately on 31st Mar 2011. Not only this LIC was having debentures of book value `50 crores in Dharampal Satyapal Ltd (DS Group) a leading smokeless tobacco company.
“It is shocking to see that LIC & other Government Insurance Companies are” still investing in ITC,” VHAI said in a statement.
It has been seen that Indian Tobacco Company (ITC) cigarette business grew by 14% recording net sales of `3385.15 crores during the quarter July — September 2012. ITC Ltd reported 21.2% jump in net profit at `1836.42 crore for the second quarter ended September 30, 2012 on back of 19.6% growth in net sales at Rs 7146 crore.
Citing Article 5.3 of the convention, Bhavna Mukhopadhyay, executive director VHAI said, “Government institutions and their bodies should have no financial interest in the tobacco industry unless they are responsible for managing the country’s ownership in a state-owned tobacco company. Parties should not allow any official of the government of any semi/quasi government body to accept payments from industry.”
The RTI also disclosed as of the quarter ended September 2012, the Life Insurance Corporation, other insurance companies and government’s Unit Trust of India held a staggering 31.52 per cent equity (through owning shares) of the company.