Par panel objects to CMPFO not parking Rs 45K cr in PSU banks

A parliamentary panel today raised objections on Coal Mines Provident Fund Organisation (CMPFO) not parking a huge Rs 45,886.45 crore with the public sector banks and also said the issue of deviation from norms should have been referred to a central investigating agency.

CMPFO has invested Rs 29,363.95 crore in ICICI Securities Primary Dealership Ltd besides Rs 16,522.5 crore in the Special Deposit Scheme of the Ministry of Finance, "which does not seem appropriate", the Standing Committee on Coal and Steel said in its report tabled in Parliament.

"The Committee have failed to understand why these funds were not invested in public sector banks," the panel, headed by Trinamool Congress MP Kalyan Banerjee said.

Raising questions on the role of the Coal Ministry to protect workers interests, it said it was "dismayed" that there was no monitoring mechanism in the Ministry and even the "then Commissioner CMPFO had acted beyond his delegated powers by extending the tenure of fund managers without taking approval of Board of Trustees (BOT)".

It said "the Commissioner has neglected the most important duty assigned to him and the investment decisions are left to the wisdom of portfolio managers".

While deprecating the "unusual" powers exercised by the then Commissioner, the Committee said it failed to understand why these "irregularities were not brought to the notice of the Ministry by BOT which is headed by Secretary Coal and why appropriate action was not taken against the Commissioner".

"The Committee feel that besides taking strict departmental action against all those who were responsible for flouting rules and procedures, the matter should have been referred to a Central Investigating Agency in the first instance," it said.

Asking Coal Ministry to take adequate safeguards to secure the safety of investments that are vested with fund managers, it also demanded to know about the "deficit of Rs 1,947 crore in Pension Fund Corpus as on March 31, 2005".

The CMPFO is a social security organisation, which among other things, is mandated to make payment of Provident Fund advances, refund and pension in the event of related eventualities and investment of contributions for best returns so as to offer its members the best rate of interest on their contributions.