The Employees’ Provident Fund Organisation (EPFO) is planning to hire a consultant for monitoring its bond investment.
This move follows EPFO’s arduous struggle to recover nearly Rs 1,400 crore that it invested in Infrastructure Leasing and Financial Services (IL&FS) and Dewan Housing Finance Corp. Ltd (DHFL), which was later declared bankrupt.
According to a report presented in the Rajya Sabha on Friday, the parliamentary standing committee on labour said it accepted the EPFO proposal, even as it criticized it for delaying the step to safeguard statutory social security deposits of its subscribers.
The committee appreciates that in order to make the process of review more stringent, the central board, EPF, has recommended for appointment of a third-party consultant in addition to the existing one.
BJD MP Bhartruhari Mahtab who headed the committee said, “In order to establish a stronger and more stringent monitoring mechanism a third-party consultant should have been appointed by now. This move will make sure there is a strong performance review of the investments made that will subsequently assure safe and sensible investment of the corpus,”
“This move will help in securing the investments made by the EPFO and subsequently the retirement corpus of professionals. Under a strict review system, investments will remain safe from the perils of mismanagement and from making losses, and this will benefit the working people in return,” he said
Earlier In 2019-20, before the COVID-19 pandemic, the labour ministry had proposed that EPFO get the first right to a company’s assets going bankrupt.
Additionally, Labour Ministry had proposed that time two categories of companies in terms of payments of such high priority—the first are those companies where EPFO has invested, such as IL&FS and DHFL, and the second are those that owe employees money as part of their EPFO obligations.
However, the proposal did not make headway, and almost Rs. 574 crore in IL&FS and around Rs. 800 crore from DHFL remains out of EPFO’s reach.
Standing Committee report said, citing the ministry, that all EPFO funds are invested strictly through the appointed portfolio managers as per the investment pattern.
“In order to have a proper evaluation and audit of the investments made, EPFO has appointed some agencies as a consultant to carry out regular performance evaluation and provide research-based reports; a concurrent external auditor to conduct an audit of the investment transactions; a custodian to monitor the timely receipt of interest and maturities of investments,” the report said.
An EPFO official said they are in touch with concerned authorities in markets regulator Sebi and dispute resolution bodies to get back retirement fund dues from these firms.
