Life India Corp. of India has warned that its information technology infrastructure is exposed to cyber attacks and breaches, which can jeopardize the security of the information stored and transmitted through its computers, damaging its reputation and leading to litigation.
LIC said it needs to spend significant resources to protect against security breaches that can come from employees, agents, vendors and other stakeholders. “While our corporation has not experienced such incidents during the period from 1 April 2018 to the date of this red herring prospectus, our computer networks and IT infrastructure may be exposed to computer attacks or disruptions,” the company said in its red herring prospectus.
The security warnings come days ahead of LIC’s initial public offering (IPO), which goes live on 4 May to 9 May. Allotment to anchor investors starts 2 May.
The government expects to raise about ₹21,000 crore from the public offer, India’s largest IPO, at the upper end of the price band. The state-owned insurance firm said it has to spend more on securing its client and customer data. “We may be required to expend significant resources to protect against the threat of the security breaches or alleviate problems caused by these breaches.”
“…any security breach, data theft, unauthorized access, unauthorized usage, virus or similar breach or disruption could result in loss or disclosure of confidential information, damaging our reputation, litigation, regulatory investigations or other liabilities, which could have a material adverse effect on our business, financial condition, results of operations and cash flows,” LIC said.
It warned that a security threat may come from a third-party vendor or it maybe unable to defend itself against the advanced techniques used by hackers. “We may be unable to anticipate the techniques or implement adequate preventative measures. Even if we anticipate the attacks, we may not be able to counteract the attacks in time to prevent them,” said LIC. “…our arrangements with third-party vendors and service providers expose us to the risk of such third parties failing to maintain and protect our security and confidentiality or our policyholders’ information and data,“ the RHP added.
The government will sell a 3.5% stake, or 221.3 million shares in LIC. Out of this, 22 million will be reserved for policyholders and 1.5 million for staff of the insurance firm.