Mumbai: As India grapples with a series of frauds by the promoters of finance companies and banks, it has come to the fore that the Uttar Pradesh government has allegedly invested employees’ provident funds worth Rs2,600 crore in the tainted Mumbai firm, Dewan Housing Finance Corporation Limited (DHFL), which is facing charges of fraud and fund diversion.
The promoter of DHFL, Dheeraj Wadhawan, was recently grilled by the Enforcement Directorate for his alleged link with the gangster Iqbal Mirchi (who passed away in 2013), a former aide of underworld don Dawood Ibrahim.
The matter, which came to light on Friday, has struck panic among 40,000 employees of the state-owned UP Power Corporation Ltd (UPPCL), as their general provident fund (GPF) and contributory provident fund (CPF), an amount of Rs 2,600 crore, is now stuck with the tainted firm.
The UPPCL employee unions have alleged that transferring the entire amount of employees’ provident funds, their retirement security, into the accounts of a tainted firm is a gross violation of norms.
“The UP State Power Sector Employees Trust, which is entrusted with management of funds, deposited the entire PF collections in HDFL as fixed deposits from March 2017 till December 2018. The interest from those FDs was being used to pay retired employees. Only this February did we get a hint about the DHFL deal when the trust started defaulting on payments. It was the same time when the Bombay High Court stayed payments of DHFL in the wake of its links with several shady companies and deals. The payments stopped completely last month, forcing us to come out in the open,” alleges Rajeev Kumar Singh, general secretary of UP State Electricity Board Engineers Association (UPSEBEA).
Contd. on P6