The Employees’ Provident Fund Organisation (EPFO) has proposed to rent a guide to watch its bond investments after struggling to get well almost ₹1,400 crore sunk into Infrastructure Finance and Leasing Ltd (IL&FS) and Dewan Housing Finance Corp. Ltd (DHFL) that later went bankrupt.
In a report offered within the Rajya Sabha on Friday, the parliamentary standing committee on labour mentioned it accepted the EPFO proposal, even because it criticized it for delaying the step to safeguard statutory social safety deposits of its subscribers.
“The committee appreciates that with the intention to make the method of assessment extra stringent, the central board, EPF, has really useful for appointment of a third-party guide along with the present one,” the report mentioned.
“In view of the imperatives concerned in establishing a stronger monitoring mechanism, the committee belief that the third get together guide ought to have been appointed by now, in order to make sure a sturdy efficiency assessment of the investments made, which in flip, would guarantee protected and prudent funding of the corpus,” mentioned the committee headed by Biju Janata Dal parliamentarian Bhartruhari Mahtab.
A board member of the EPFO mentioned on situation of anonymity that the retirement fund physique appears to have erred in its obligation to behave in time and shield staff’ cash.
In 2019-20, earlier than the coronavirus outbreak, the labour ministry had proposed that EPFO get the primary proper to an organization’s belongings going bankrupt.
It even proposed two classes of corporations for such precedence cost—the primary are these corporations the place EPFO has invested, comparable to IL&FS and DHFL; whereas the second are people who owe staff cash as a part of their EPFO obligations.
However, the proposal didn’t make headway, and nearly ₹574 crore in IL&FS and round ₹800 crore from DHFL stay out of EPFO’s attain.
“I’m not very certain if EPFO executives are severe about getting that cash again. The basic sentiment in EPFO is it’s a comparatively small corpus compared with the deposits they get. But what they neglect is EPFO shouldn’t be a non-public for-profit enterprise home, and you’ll let go of some funds,” the board member cited above said. “IL&FS- and DHFL-like incidents tell us that we failed to act in time,” the member mentioned, including that the funding finance committee of the EPFO has deferred its assembly in current months at the least twice.
The panel report mentioned, citing the ministry, that every one EPFO funds are invested strictly by means of the appointed portfolio managers as per the funding sample.
“In order to have a correct analysis and audit of the investments made, EPFO has appointed some companies as a guide to hold out common efficiency analysis and supply research-based studies; a concurrent exterior auditor to conduct an audit of the funding transactions; a custodian to watch the well timed receipt of curiosity and maturities of investments,” the report mentioned.
An EPFO official mentioned they’re in contact with involved authorities in markets regulator Sebi and dispute decision our bodies to get again retirement fund dues from these companies.
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