CEO’s arrest may hit future plans of LIC Housing Finance

CHENNAI - The arrest of LIC Housing Finance Limited’s CEO Ramachandran Nair by India’s federal probe agency Wednesday would be a setback for the company’s ambitious plans of floating a private equity focussed on reality sector and also a bank.

Speaking to reporters here in September, Nair said the company would be floating a real estate focused private equity fund to the tune of Rs.500 crore. He had said the company was also planning to foray into the banking sector.

Meanwhile, top management of the LIC were closeted in meetings and were not available to comment on the next course of action - whether there will be an interim CEO to run the housing finance company.

The CBI Wednesday also arrested Naresh K. Chopta, secretary, investment department, LIC, R.N. Tayal, general manager, Bank of India, Mumbai, and Maninder Singh Johar, director, Central Bank of India, New Delhi, in the housing loan bribery scam.

Meanwhile, in an unsigned media statement issued Wednesday, purportedly approved by LIC Chairman T.S. Vijayan, the LIC Housing Finance said that all procedures and due diligence as approved by the company’s board have been adhered to in approving the loans.

According to the statement, the loans are secured by assets and its loans to builders constituted only 11.34 percent of the total loan portfolio.