An exposure of Rs. 25 Crore of LIC to Gitanjali

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A sum of Rs. 25 Crore outstanding is present with the Life Insurance Corporation of India from the Gitanjali group with a BSE of -4.90 percent against which it has a security of the Hyderabad Gem Special Economic Zone of the group. A loan of Rs. 125 Crore had been originally extended out of which a huge sum of money had been repaid. The corporation has an exposure of a term loan which was provided to the Nirav Modi and Mehul Choksi groups for SEZ. The Hyderabad Gems SEZ is a subsidiary of the Gitanjali Group and lies amongst the properties which are associated with the income tax department. The property has been registered as a diamond processing zone valued at Rs. 1,200 Crore.

As per the lenders, if LIC follows recovery under the insolvency and bankruptcy code of the NCLT, the security on its assets will need to e compromised. However, the advantage of this lies in the fact that the claim of the creditors will get priority over that of the government as well as the employees. But, if the security is enforced by the corporation, it might have to face some claims from the government. SEZ is one of the biggest centers for the Nirav Modi group and Mehul Choksi group, houses numerous diamond and jewelry manufacturing units. PNB had filed a complaint after detecting unauthorized letters of undertaking worth Rs. 12,600 Crore.

After the detection of the fraud, Modi and Choksi have been investigated by numerous agencies. The Gitanjali Gems Park in Hyderabad too was shut down after a raid by the Enforcement Directorate in connection with the fraud. Due to this, numerous workers were hit in the SEZ as well.