Deepak Sood, CEO of Future Generali India Life Insurance, has resigned. The exit follows a DNA exposé on the shareholding pattern of the company in November and December.
Gorakhnath Agarwal, chief actuary and chief risk officer, has been named the replacement.
Sood (pictured) said his resignation was accepted on Monday. “I am joining another company in a different field,” he said.
Sood’s exit reflects the turmoil at the insurer, where a restructuring exercise of the past few months has led to workforce reduction by a third and closure of a similar magnitude of branches.
Kishore Biyani, the chief promoter, is looking to sell the non-life business. But Sood’s exit could undermine negotiations with buyers, said experts.
Biyani has signed a non-binding agreement with Industrial Investment Trust Ltd, a Mumbai-based non-banking finance company, for life insurance business, while the company is in talks with L&T Finance and others for the non-life business. These, however, hasn’t moved much forward, sources said.
DNA had reported on November 25 that Future Generali India Life seems to have circumvented foreign direct investment regulations through a complex web of shareholding.
Sprint Advisory, a shell company with no asset of its own and paltry income of just Rs1 lakh attracted a valuation of Rs2,500 per share from Maatschappij Graafsschap, a Holland-based unit of Assicurazioni Generali SpA, while Pantaloon Retail was issued the same Sprint share at just Rs10.
As a result, Maatschappij ended up with just 0.4% stake in Sprint after investing Rs283.66 crore, while Pantaloon Retail had 99.6% by investing Rs283.54 crore.
Sprint holds 49% stake in Future Generali Life Insurance Company, while Pantaloon Retail India and Maatschappij Graafsschap Holland NV hold the balance 25.5% stake each.
After the DNA exposé, Tapan Sen, Member of Parliament wrote a letter to finance minister P Chidambaram on December 19 demanding handover of the probe of FDI violation to the Enforcement Directorate Serious Fraud Investigation Office and the Securities and Exchange Board of India.
The board of Future Generali Life is headed by former Sebi chairman G N Bajpai, who is considered an expert on insurance valuations.
Interestingly, Gorakhnath Agarwal was the head of the Acturial Society of India when the controversial shareholding pattern of Future Generali was structured, raising eyebrows.
“As head of Actuarial Society, Agarwal was supposed to be the conscience-keeper of the industry. How he gave the consent to this controversial shareholding structure should be investigated,” said a Mumbai-based corporate lawyer and expert on insurance regulation.