Health activists have expressed shock and displeasure over the continued investment that the Life Insurance Corporation (LIC) and other government insurance companies are making in the Indian Tobacco Company (ITC).
Calling it “completely unethical and exposing the double standards of the government”, Binoy Mathew of the Voluntary Health Association of India, a non-government organisation working in the area of tobacco control, said: “LIC invested heavily in ITC during 2011. The number of equity shares held by LIC in ITC Ltd was around 99.58 crore, which have a book value of Rs.3,561 crore approximately on March 31, 2011. This was revealed through Right to Information Act.”
“It is shocking to see that LIC and other government insurance companies are still investing in ITC despite assurances not to do so,” he said.
However, what activists are protesting is the fact that the list of top six public shareholders of this tobacco company are insurance companies and the Government of India.
“Figures of the quarter-end in March 2014 clearly show that the LIC and other insurance companies and government’s Unit Trust of India hold a staggering 31.97 per cent equity (through owning shares) of the company,” said Mr. Mathew.
The government-owned LIC held a 13.87 per cent stake in ITC. The Unit Trust of India, a government-owned mutual fund, held a massive 11.28 per cent equity stake. Voluntary Health Association of India executive director Bhavna Mukhopadhyay explained that as per the Global Adult Tobacco Survey-India 2009-2010 report released by the Ministry of Health and Family Welfare, 14 per cent of adults (24.3 per cent males and 2.9 per cent females) smoke.
“India is one of the early signatories to an international treaty called Framework Convention for Tobacco Control (FCTC). The huge investment by LIC in one of the biggest tobacco companies of India is surely against the spirit of FCTC,” she said.
The World Health Organisation clearly states that tobacco use is one of the biggest public health threats the world has ever faced. It kills nearly six million people a year – an average of one person every six seconds and accounts for one in 10 adult deaths. Up to half of the current users will eventually die of a tobacco-related disease.
“LIC’s investments in tobacco industry goes against the credibility that the corporation has built over the years, across various segments of Indian society. LIC, the public sector company, millions of Indians trust for their lives, should not be party to the business of ITC or any other tobacco firm through massive share holding or any other investment. This is completely antithetical to the foundations of LIC’s people-oriented model of insurance business and this would ruin the public image of the corporation,” said Ms. Bhavna.