Search the Internet          Tips  Sites: Finance, Investment

GIC goes house-hunting for top management

Freny Patel

The General Insurance Corporation of India is not waiting for a formal delinking of its four state-owned subsidiaries. Moving away from a 'joint family system', the corporation is on a buying spree to house its executives in the run up to the "official" delinking. GIC has already purchased 18 apartments in Kalpataru Heights, Bombay Central, for Rs 270 million.

The national reinsurer does not own any property and all its top executives reside in apartments belonging to the four arms -- primarily those of the Bombay- headquartered The New India Assurance Company.

Of the 18 flats, 11 were bought from ICICI, said GIC officials. "We are looking for properties in Central and South Bombay for our top management," they said. Large number of flats in these prime areas are not readily available. Acquisition is thus being done via a piece-meal approach to house its executives including four general managers, six assistant general managers, financial advisor and vigilance officers, apart from the chairman and the managing director.

Applications from senior officials belonging to the cadre of manager and above have been invited for "re-housing" into new quarters. GIC's investment of Rs 270 million in real estate does not end there as the national reinsurer is on the prowl for additional properties in South Bombay, scouting for premises for chairman D Sengupta as well as a guest house in the heart of the financial centre.

GIC officials, however, said that their executives have not been asked to vacate the premises. Further, the current promotions at New India will see major transfers from various branch offices to Bombay and additional recruitment in the area of information technology. Thus, New India would require residential properties for the transferred/promoted executives, said company officials. As GIC executives vacate their present flats, the premises can be utilised by New India for its officials.

The formal delinking of the four subsidiaries is pending approval as the General Insurance Business (Nationalisation) Amendment Bill 2001 introduced in Parliament on March 12, 2001, received quite a bit of flak. The parliamentary committee on subordinate legislation stated that the notification to make GIC an reinsurer without amending the parent act is an attempt to "bypass" Parliament. Flaying the government's move as not being the right course of action, the committee said: "Issue of notification on November, 2000, restricting the activities of GIC to the area of reinsurance before amending the parent act constitutes an attempt to bypass the authority of Parliament."

Even so, the four companies have started operating as independent entities in view of the insurance regulations. New India and Oriental Insurance opted to undertake their reinsurance programmes directly.

Powered by

YOU MAY ALSO WANT TO READ:
The Rediff-Business Standard Special
The Budget 2001-2002 Special
Money
Business News

Tell us what you think of this report