As the #LIC IPO opens today, a small snippet from its history...one of independent India’s first scams involved LIC, and a large part of the credit of bringing it to light lay with Nehru’s son-in-law.
Feroze Gandhi; whose proposal of marriage Indira Gandhi had accepted as she wrote, ‘on the steps of the (Basilica) of Sacré-Coeur’ at the end of summer while ‘Paris bathed in soft sunshine,’ is said to have had an unpleasant relationship with his father-in-law Jawaharlal Nehru.
The marriage was said to eventually have become an unhappy one. But, like Indira, he too spent time in jail during the freedom struggle; and was a formidable enough parliamentarian, not least when he was embarrassing Nehru’s government.
“Mr. Speaker, there is going to be some sharp shooting and hard hitting in the House today, because when I hit, I hit hard and expect to be hit harder,” he began his expose in the Lok Sabha in 1957.
He added, “I am fully conscious that the other side is also equipped with plentiful supplies of TNT.” A member who remains unnamed in the Parliament minutes quipped a correction -“TT”-perhaps a reference to Finance Minister T. T. Krishnamachari.
Krishnamachari was to bear the brunt of the questioning about LIC’s impropriety that day.
Feroze Gandhi said that LIC had bought shares in the companies of a Calcutta-based industrialist, Haridas Mundhra, to bail him out of his financial difficulties. Many firms were said to be on the verge of failure at the time of LIC’s timely and generous assistance.
“This is not investment. This is a conspiracy to beguile the Corporation of its funds.”
The shares were bought while bypassing LIC’s own investment committee. An inquiry followed and the finance minister had to resign.
Feroze Gandhi died in his forties after a series of heart attacks. LIC’s investments remain even today shrouded in mystery and disclosures are scant.
Whether the IPO which opens today will change that, remains to be seen.
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