TS Vijayan quits as managing director of LIC

TS Vijayan, former chairman of the Life Insurance Corporation of India (LIC) has quit as managing director of India's largest insurer and financial sector entity.

The government on Thursday cleared the file relieving Vijayan, who was on leave ever since he failed to get another term as chairman of LIC, from the service.

In an unprecedented move in May 2011, the finance ministry had demoted Vijayan who functioned as LIC chairman for a five-year term, to managing director. Although Vijayan completed his five-year tenure as LIC chairman last year, he had another two years until retirement and hence was expected to receive an extension.

But the finance ministry, which was then headed by Pranab Mukherjee, did not consider Vijayan again and he was asked to continue as one of the three managing directors. DK Malhotra who was working under Vijayan was later appointed as chairman.

"I got the letter from the government clearing my VRS. As I was appointed by the Appointment Committee of the Cabinet, the government has to clear the VRS," Vijayan told The Indian Express.

Sources said the Central Bureau of Investigation (CBI) had cleared Vijayan of all corruption charges before relieving him from LIC.

Vijayan's demotion in 2011 coincided with the cash-for-loan scam which broke out in LIC in November 2010. The CBI had arrested LIC Housing Finance CEO RR Nair for approving loans after taking bribes.

The selection process of the new chairman was delayed by almost a year in the wake of an internal probe initiated by the government. Vijayan was again in the race for the chairman's post, but the selection panel picked up Mehrotra to head the institution.

Though Vijayan refused to disclose his future plans, financial sector sources said he could be in the race for the top post at the Insurance Regulatory and Development Authority (IRDA). Current IRDA chairman J Hari Narayan is retiring in February 2013.

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