New Delhi: Life Insurance Corporation of India Ltd, or popularly known as LIC has chosen to approve or never opposed resolutions proposed before shareholders of Reliance Industries Ltd (RIL) or any Adani Group companies while rejecting similar proposals at other large companies for more than three years now, according to a report by Mint.
The outlet according to The Wire found out this pattern of approach after reviewing around 9,000 voting decisions by LIC since April 1, 2022.
LIC’s rejection of similar proposals at other companies at which point onwards reportedly suggests it was adopting different stances for companies other than ‘Adani or Reliance-linked ones’.
Experts reportedly expressed concerns at how LIC makes decision and whether the government-run insurer harbours ‘different voting standards for businesses controlled by the country’s wealthiest tycoons versus other companies’.
Pointing to instances of favouritism, the report cited the incident in August 2023 where LIC voted in favour of the reappointment of Mukesh Ambani as RIL’s managing director but the government-run insurer abstained from ‘voting on Venu Srinivasan’s re-appointment as chairman emeritus and managing director of TVS Motor Company’, according to The Wire.
The insurer reportedly stated the abstention was due to ‘as per our internal guidelines’ without elaborating on the decision.
In another incident that the report cited, in June 2024 LIC voted in favour of approving lawyer Haigreve Khaitan’s appointment as an independent director on its board, as RIL sought ‘shareholder approval to ratify this decision’.
LIC again abstained two months later from voting on independent director Rajeev Gupta’s re-appointment to the board of Indian Energy Exchange Ltd, citing that Gupta had ‘excessive time commitments’ with Mint’s investigation revealing that ‘Gupta sits on the boards of nine companies’.
LIC should have abstained from voting on Khaitan’s appointment as independent director on the RIL board if it was applying the same standard because ‘Khaitan currently sits on the boards of eight companies’.
Another example that Mint cited showed LIC abstaining from voting on resolutions in June last year when Adani Enterprises sought shareholder approval to reappoint Gautam Adani’s brother Rajesh Adani as managing director for five years and fix his remuneration and also when it sought approval to reappoint Gautam Adani’s nephew Pranav Adani as ‘executive director for five vears and to fix his remuneration’, stating that they were ‘compliant with law but no absolute cap on variable pay’.
Showcasing a different standard, LIC voted against resolutions of Coromandel International Ltd, owned by the Murugappa Group, when the company wanted to appoint the late Arunachalam Vellayan as a director and fix his remuneration alongside appointing Narayanan Vellayan as executive director and fix his remuneration.
LIC cited ‘governance concern’ and ‘no absolute cap on variable pay’ as the reason for voting against both resolutions, according to the report.