Company Outsider: Is LIC an insurer of India's millions or a tool for strategic interventions?

Subscribe to enjoy similar stories. Company Outsider is a weekly newsletter by Sundeep Khanna. Subscribe to Mint's newsletters to get them directly in your email inbox. "The attempt and not the deed confounds us," says Lady Macbeth in Shakespeare's classic play Macbeth.

Sometimes it's not just what you do, but why you do it that raises eyebrows. Mint's latest investigation into the voting patterns of Life Insurance Corporation (LIC) is a perfect example of that. As per the story, LIC hasn't rejected a single shareholder resolution from Reliance Industries or Adani Group companies over the past two-and-a-half years, even as it routinely rejected similar proposals at other firms.

Moreover, it seems to have violated its own published voting policy by approving auditor-qualified accounts, something its guidelines explicitly prohibit. The state-controlled insurer may well have had good reasons for every vote it has cast or didn’t cast. But by not applying standards uniformly, it has lent itself to doubt.

And in matters of fiduciary duty which affects millions of policyholders' savings, doubt is corrosive. When an institution with assets under management (AUM) of ₹57 lakh crore (a figure that would place it among the top 10 of the world's largest sovereign wealth funds), seemingly breaks its own rules for specific companies, the obvious question is why and what are the implications for its standing as an unbiased investor? It is an issue that has plagued LIC in the past. The Washington Post recently alleged that the finance ministry orchestrated its Adani investments; short-seller Hindenburg raised similar questions in 2023.