Looks like there is a total breakdown in the public sector financial institutions, AND yet another farce of Money movement seems to be on the growth.

Everyone knows as to what’s happening in the U T Imess case, but they should get ready to confront another farce coming up > already chinks are showing up in another Indian behemoth Life Insurance Corporation and it’s reached such a stage that one doesn’t know what the hell is going out there, even on matters of vital importance. The corporation sold its stake in Modi Rubber and broke ranks with other financial institutions, the same of which has got LIC on the move to launch a vigorous damage-control campaign.

However the same is too late and could be only a tip of iceberg of the dreaded sound of the word FRAUD to come into open. The current revelation has only helped highlight the gaping holes in the insurance behemoth’s internal systems and processes and the corporation has blamed two middle-level officers for selling its 12 per cent stake in Modi Rubber Ltd to B K Modi and alleged that the officers concerned acted `unauthorized and illegally’ by tendering LIC’s holding under the open offer made by the MRL promoters.

In a press release yesterday evening (23/7/2001) it said that on the prima facie evidence of unauthorized and illegal transaction, both the middle level officers have been suspended and the officials belong to the ranks of deputy secretary and assistant secretary. In the statement, the corporation has said it has filed a suit in the Bombay High Court, seeking to withdraw the `unauthorized and illegal transition’ even as merchant bankers claimed that reversing the decision could be difficult in case of demat shares.

And in a spirited defense, the corporation has stated > The chairman and the managing director in charge of investments were away on tour and came to know about the unauthorized and illegal transaction only on July 18, 2001 < but the statement missed one particular and vital clincher and that is that the transaction was completed on July 16.

The statement adds: ``It would be pertinent to mention here that in LIC, the authority to disinvest rests with the investment committee of the corporation and the process for obtaining the approval of the committee was yet to be initiated in this case.’’ A policy of wait and watch should be adopted and the entire drama should be seen with a sharp presence of mind and alertness and pray GOD that LIC does not turn out to be another UTI.