The Bombay High Court on Thursday heard a petition alleging that PSU insurers such as LIC are going against the government's anti-tobacco stand by investing in cigarette manufacturing company ITC.
The World Health Organization tobacco treaty bars the government from investing in tobacco companies, they said. The petitioners also said that the investments make the government party to tobacco's promotion.
The six petitioners include the Managing Trustee of the Tata Trusts, Lakshman Sethuraman, Ashish Deshmukh, Member of Maharashtra Legislative Assembly, Sumitra Hooda Pednekar, widow of a Maharashtra Minister who died of throat cancer, Pankaj Chaturvedi, a Surgeon at Tata Memorial Hospital, and two doctors, Abhay Bang and PC Gupta.
The respondent's counsel has replied that the withdrawal of PSU insurers' investment will affect their image and will also impact retail investments in the company, apart from hitting the government's tax revenues.
They also said the investments were in the secondary market and not any direct investment in the operations of the company.
The Bombay High Court has asked the petitioners to make ITC, market regulator SEBI and the government party to the case.
The respondents are required to reply to six months time.Watch video for more.