EPFO issues 'strong' notice to Reliance Capital over `2,500cr default

New Delhi: After having a default of Rs 2,500 crore, the Employees Provident Fund Organisation (EPFO) has decided to issue a "strong" notice to Reliance Capital in which the retirement fund of employees has been invested.

Other than Reliance Capital, the EPFO, which is the largest social security organisation with seven crore members and covering over 28 crore families are yet to recover another nearly Rs 600 crore from Dewan Housing Finance Corporation (DHFL).

It is apparent that the government is facing serious trouble in recovering the hard-earned money of the employees as the defaulted investors may use the "investment at market risk" clause to defend their losses.

As per experts, the Labour Ministry has already been alerted about the different modus operandi that defaulters can use to protect themselves from paying back the invested capital.

The other major hurdle before the government is that Reliance Capital has been taken over by Japanese company Nippon Life, which has 75 per cent stake, the experts said, adding that since it's a debt default, the government is initiating all necessary actions against all the defaulters to recover the defaulted amount.

Hitting out at the government over its non-seriousness in bringing back the hard-earned money of poor employees, labour representatives have demanded "strong and stringent" action against all the defaulters, including Anil Ambani-owned Reliance Capital and DHFL.

Talking to Millennium Post, All India Trade Union Congress (AITUC) national secretary Sukumar Damle said: "We have demanded stringent action against the defaulters, but the government is not paying any heed as it seems they want to protect the defaulters and not employees whose hard-earned money has been fraudulently taken away."

"It a serious fraud and the Centre must initiate criminal procedures against the owners of Reliance Capital and DHFL. They cannot run away with workers' money," Damle said, who was present in the recently concluded EPFO board meeting.

Expressing her anguish over the government's pro-defaulter approach, Amarjeet Kaur, who is AITUC's general secretary, said: "The Centre is still sitting ideal against the defaulters of EPFO. We want action, but the government is deferring it."

The government seems to be protecting only defaulters as in January 2019, the Centre had claimed that 27 defaulters had fled the country, but now it has come up with a total of 38 defaulters who have left the country in the last four years, she said, adding: "So all the defaulters of EPFO would also be protected on the same lines."

According to the Labour Ministry's report, members of EPFO withdrew Rs 39,402.94 crore between March 25 and August 31 after the government had imposed the nationwide lockdown on March 25, 2020, to contain the spread of Coronavirus.

The maximum amount of EPF withdrawals from March 25 to August 31 were recorded in Maharashtra as the worst Covid-19 hit state reported Rs 7,837.85 crore withdrawal, followed by Karnataka (Rs 5,743.96 crore) and Tamil Nadu, including Puducherry (Rs 4,984.51 crore).