Government has decided to take the extreme punitive measures against New India Assurance chairman M Ramadoss by suspending him over the irregularities in distribution of credit insurance cover to Paramount Airways. The cover was granted in 2009 by Oriental Insurance Company which was then headed by Ramadoss. In his absence chairman of Chennai based United India Insurance, G Srinivasan, will take charge.
The issue which involves insurance covers totaling to Rs 400 crore is currently under the scanner of Central Bureau of Investigation. These credit covers were used for sourcing loans from public sector banks. Trouble began when Paramount Airways came under a bad phase and the banks lined up to seek repayments only to discover that their exposure was not only to Paramount Airways but also to Oriental Insurance.
Earlier government has shown similar ire by denying extension to TS Vijayan owning to the numerous complaints against. The suspension of Ramadoss serves as the second example