LIC shares look up after initial tumbling

Mumbai : A day after Life Insurance Corporation scam unfolded and eight officials were arrested,the shares in LIC Housing Finance erased early losses of 11.5 per cent and climbed 3.5 pe rcent on Thursday.

Economic Offences Wing of the Central Bureau of Investigation (EOW-CBI) on Wednesday swooped on the offices of LIC Housing Finance, Money Matters- a firm providing financial services to corporates- and three nationalised banks and arrested eight of their top officials on charges of taking bribes to grant corporate loans.

LIC is also preparing documents to take action against the “errant employees” by suspending both the CEO of LIC Housing Finance and the Investment Secretary.

LIC is also contemplating launching a parallel probe by its vigilance wing.

The CBI also arrested Rajesh Sharma, chief of executive of Money Matters Group.

On Thursday at 10:15 am, the shares in LIC Housing were up 3.5 percent, while the main stock index gained 0.8 per cent.

The CBI believed the Money Matters had bribed the bankers to get loans for many companies, including wind energy developer Suzlon, hill station township builder Lavasa, and Mumbai developer DB Realty.

All the accused will be in the CBI custody until Monday. They have been charged under the Prevention of Corruption Act.

The CBI has found irregularities in sanctioning housing loans worth several hundred croes or Rupees to the big companies.