EPF Funds Risked
ALL fears of losing the public money by investing in the bonds market have unfortunately come true. In a recent report published in the newspapers, thousands of crore rupees of EPF funds invested in tradable bonds in IL&FS group have been put to the risk of being lost as the group companies are facing near bankruptcy situation and are presently in the midst of resolution procedures in the National Company Law Tribunal (NCLT) under section 53 of the Insolvency Bankruptcy Code Act (IBC).
It is stated that over 50 EPF funds of various companies, both in PSUs and private sector giants, involving the post retirement savings and benefits under EPF of over 15 lakh employees have been put in such a risk following their exposure to IL&FS. Since the tradable bonds of IL&FS in which the EPF funds of such huge dimension has been invested are being considered as unsecured debt of IL&FS and thereby losing priority vis-à-vis debts from the banks and financial institution in the resolution process under IBC; the risk of loss has become more imminent.
It may be recalled that the workers’ representatives in the Central Board of Trustees (CBT) of EPFO have been consistently opposing the investment of EPF funds in any speculative tradable instruments, but the government of India has bulldozed the unanimous opposition of the workers representatives and channelised a part of EPF funds for investment in speculative instruments. The horrors are in front of everyone; the life-time savings in EPF of the concerned workers and employees of the affected establishments is being pushed to the possibility of imminent loss of even the invested amount itself, not to speak of interests.
The government must draw the appropriate lesson from such happening and review the decision imposed by the finance ministry to invest EPF fund up to 15 per cent in speculative trade instruments of all kinds. The government must also take the responsibility of protecting the EPF savings of the employees/establishments which have already been pushed to risk of loss owing to their exposure with IL&FS group along with interest since concerned workers should not be subjected to loss of their savings for no fault of theirs but for wrong and unilateral decision of the government.
In this regard a letter was also written to the minister of labour and employment by Tapan Sen, general secretary of CITU on February 14, demanding immediate intervention.