DHFL scam: CBI takes over UP PF fraud probe

The CBI has taken over investigation into the Rs 2,267-crore Employees' Provident Fund fraud in Uttar Pradesh, where hard-earned savings of power sector employees were invested in the scam-hit Dewan Housing Finance Corporation (DHFL), officials said on Friday.

The agency has re-registered the FIR filed by the Uttar Pradesh police at the Hazratganj police station, according to officials.

Pravin Kumar Gupta, former secretary of the UP State Power Sector Employees' Trust; and Sudhanshu Dwivedi, former director, finance, of the Uttar Pradesh Power Corporation Limited (UPPCL); have been named as accused for criminal breach of trust, cheating and forgery. Both were arrested by the police last November, the officials said.

The DHFL came in the eye of the storm after a report suggested that the company, through layers of shell companies, allegedly siphoned off Rs 31,000 crore out of total bank loans of Rs 97,000 crore.

Provident funds of the UPPCL employees were being invested in the fixed deposits of nationalised banks till October 2016. On a proposal of Gupta and former UPPCL managing director A P Mishra, the investment of funds started in PNB housing since December 2016, according to the officials.

From March 2017-December 2018, Gupta, after getting endorsement from Dwivedi, violated central government guidelines -- that such funds would not be invested financial institutions other than scheduled commercial banks -- and invested over 50 per cent of funds in the DHFL, the FIR stated.

It said the investments were in deposit schemes of DHFL despite knowing it was not a scheduled commercial bank and an 'unsafe' company.

A total of Rs 4,122.70 crore was invested in the DHFL, out of which Rs 2,267.90 crore are still outstanding, officials said.