Provident fund bond investment of Rs 11,000 crore at risk

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AHMEDABAD: The Employees Provident Fund Organization (EPFO), which has an estimated 2.5 crore members, is questioning its investment in bonds of various companies worth Rs 11,000 crore. This is an investment in which the invested companies have defaulted and no interest or principal is paid. The organization invests the amount of salary savings and interest on it at the time of retirement of the employees in different sectors and pays back accordingly. If this amount is not returned, EPFO's funds could be hit hard.

No principal or interest is being paid on the bonds of IL&FS, Reliance Capital with the outstanding amount being Rs 3 crore. In addition, the credit ratings of bonds invested by Indiabulls Housing, IDFC First Bank and Yes Bank have been weakened.

EPFO's total investment in Diwan Housing was Rs. As on September 30, Rs. 313.04 crore against principal and Rs. 190.2 crore of interest have not been recovered. Dewan Housing's bankruptcy proceedings have been completed and Rs 3.5 crore in cash and Rs 2.5 crore in securities have been recovered.

Although there is no default in Yes Bank or IDFace First Bank, their credit rating has been weakened, raising concerns among EPFO ​​investors. EPFO has bonds of Yes Bank, IDFC First Bank and India Bulls Housing Finance.

In addition, EPFO ​​has an investment of Rs 3.5 crore in IL&FS and is in the process of being resolved. The company has defaulted on the principal and interest amounting to Rs 2.17 crore payable to EPFO.

Consideration to file a criminal case against Reliance Capital

The EPFO ​​bought Reliance Capital's bonds worth Rs 4,500 crore, the largest share of the total dubious bond investments. The organization owes Rs 5 crore in principal and interest to the company. A meeting of the Central Trustees will be held on the 30th to consider a criminal case against Reliance Capital. The organization has also asked the Ministry of Labor, Reserve Bank, SEBI and the stock exchange to initiate bankruptcy proceedings against Reliance Capital due to arrears.

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