Clean up LIC of India's Balance Sheet for its IPO!

 Source: https://www.hindustantimes.com/business-news/india-to-hire-deloitte-sbi-caps-to-help-lic-prepare-for-ipo/

India to hire Deloitte, SBI caps to help LIC prepare for IPO

The coronavirus pandemic has prompted the administration to boost market borrowing as revenue slumped following a nationwide lockdown.

BUSINESS Updated: Aug 22, 2020 09:59 IST

Bloomberg| Posted by Susmita Pakrasi

Bloomberg
The government will soon invite bids seeking firms to value LIC, the people said asking not to be identified citing rules on speaking to the media.(REUTERS)

India is poised to hire Deloitte Touche Tohmatsu India Ltd. and SBI Capital Markets Ltd. to help Life Insurance Corp. of India prepare for an initial share sale, people with knowledge of the matter said.

The advisers will help evaluate the capital structure of India’s biggest insurer as well as aid the company in reworking its financial statement, according to a tender document issued in June. The government will soon invite bids seeking firms to value LIC, the people said asking not to be identified citing rules on speaking to the media.

Prime Minister Narendra Modi’s government is keen to go ahead with the initial public offering -- potentially India’s biggest -- to help plug a widening budget gap. The coronavirus pandemic has prompted the administration to boost market borrowing as revenue slumped following a nationwide lockdown.

A spokesperson for the Ministry of Finance couldn’t immediately be reached outside business hours.

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In light of the above-mentioned report, we, the resigning ex-employees would like to appeal to the external auditors to examine whether LIC of India accounts for the amounts it repudiates in respect of the Wage Revision Arrears, as well as the difference in Statutory Retirement Benefits payable like Provident Fund and Gratuity; in its Balance Sheet; every time that a wage revision takes place in the Corporation. 

LIC of India repudiates these payments through insertion of a Clause 31B in the Wage Revision Charter. This clause has been declared to be 'Ultra vires' by the Supreme Court in its judgment in 2007, yet LIC of India, in gross CONTEMPT OF COURT, keeps including it in all its Wage Revision Charters!

An Accounts Officer in the Corporation had nonchalantly told me that since these amounts aren't payable, as per the Charter, they are not at all accounted for, in the Statements of Accounts of the Corporation! 

This is a clear case of omission and commission!

For LIC of India, it is a matter of 'Out of sight, out of mind and out of the Books of Accounts too!' as far as the resigning ex-employees are concerned!

This means that the repudiated amounts of several crores of rupees have conveniently been omitted in the Liabilities section of the Balance Sheet of the Corporation since 1st August, 1997, more than two decades, since when LIC of India has been illegally repudiating the arrears payments.

In effect, the Assets would appear to be wrongly inflated. This skewed Balance Sheet will not give a true picture of the finances of the Corporation, if provisions have not been made for these liabilities.

Interestingly, LIC of India didn't give me any information regarding the amounts repudiated or the number of employees who have been unjustly and illegally deprived of their dues; in response to my RTI appeal.

Had LIC of India accounted for it, it could have given me the information! 

A thorough investigation is needed before the IPO of LIC of India is announced.

The repudiated dues must be paid with interest to all of us at the earliest.

LIC of India commits the same blunder impudently defying Supreme Court judgments!

Arrears repudiated by LIC of India again, despite a Supreme Court judgment in 2007, declaring the said clause of repudiation to be 'ultra vires'!

Excerpt from the Gazette Notification

 MINISTRY OF FINANCE (Department of Financial Services) (INSURANCE DIVISION) NOTIFICATION New Delhi, the 14th January, 2016 G.S.R. 28(E).—

In exercise of the powers conferred by section 48 of the Life Insurance Corporation Act, 1956 (31 of 1956), the Central Government hereby makes the following rules further to amend the Life Insurance Corporation of India, Class I Officers (Revision of Terms and Conditions of Service) Rules, 1985, namely: ─ 1. (1) These rules may be called the Life Insurance Corporation of India, Class I Officers (Revision of Terms and Conditions of Service) Amendment Rules, 2016. (2) Save as otherwise provided in these rules, these rules shall be deemed to have come into force on the 1st day of August, 2012. (3) These rules shall be applicable to those Class I Officers who were in the whole-time salaried service in the permanent establishment of the Corporation on or after the 1st August, 2012: Provided that where any Class I Officer gives a notice in writing to the Corporation, within a period as specified by the Corporation, expressing his option to be governed by the provisions of these rules from a date not earlier than the date on which the said rules come into force and not later than the date of publication of this notification in the Official Gazette, then the Corporation may, by order, permit such Officer to be governed by the said rules with effect from the said date and no arrears for the period prior to the date so opted shall be payable to such officer: 6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)] Provided further that the officers whose resignations had been accepted or whose services had been terminated under rule 39 of Life Insurance Corporation of India (Staff) Rules, 1960 during the period from the 1st August, 2012 to the date of publication of this notification in the Official Gazette, shall not be eligible for the arrears on account of revision. 

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Kindly note that the same clause was there in the Wage Revision Charter of 2010 also, wherein my arrears were illegally repudiated, along with that of scores of other resigning employees like me. In 2012, I had filed an RTI appeal against the Corporation. LIC of India has not given me the full statistics regarding number of ex-employees whose dues have been repudiated since 1997, amounts involved, etc. All the details of my RTI crusade are available on this blog.

Is the Finance Ministry and LIC of India in perpetual limbo? Don't they refer to the Supreme Court's judgments on this issue? Do they think that they are above the laws of this land?

I have been pointing out the Supreme Court's judgment in this blog since 2014! All the judgments on this issue are available easily on the internet. Both, LIC of India and the Government of India are tech-savvy, so it is impossible that they don't know about this judgment and its ramifications!

Is this the right way forward for DIGITAL INDIA? Or even for talented, hard-working and sincere employees like us; to be so unjustly deprived of our legally rightful, hard-earned dues?

Would the Honorable Prime Minister of India please intervene on our behalf and resolve this issue at the earliest, so that all of us long-suffering ex-employees could gracefully get our dues?

All of us would be highly obliged!