The Enforcement Directorate (ED) has begun probing the alleged money laundering of the investments of Uttar Pradesh Power Corporation Limited (UPPCL) employees’ provident fund (PF), parked with mortgage lender Dewan Housing Finance Corporation Limited (DHFL). The total value of the corpus was Rs 4,122 crore.
While the economic offenses wing (EOW) of the Uttar Pradesh Police is probing the alleged criminal conspiracy and unauthorised investment of the PF corpus in DHFL, the ED will probe the possibility that the money was laundered and the network used to funnel it.
According to sources, the ED has registered a money laundering case in this regard in New Delhi. This week, a team of ED officials had also visited Lucknow and met with EOW officials probing the PF scam case.
“The ED officials were briefed about the case and the probe conducted by the EOW so far. They also took along some documents for investigating the money-laundering angle in the PF investment episode,” EOW director general Rajendra Pal Singh told Business Standard in Lucknow today.
He said the EOW and ED probes would progress concurrently, since the two agencies had different briefs for investigation.
While Rs 4,122 crore was parked with DHFL between March 2017 and December 2018, about Rs 2,267 crore is still outstanding with the company, which has been barred by the Bombay High Court from making fresh repayments owing to another ongoing ED probe into money laundering.
So far, EOW has arrested 14 persons in the PF investment case, including three serving or suspended UPPCL officials. The Adityanath government has even recommended a CBI probe, although the central agency is yet to take over the high profile case.
The funds were invested in installments through 28 brokerage or bogus firms in connivance with the officials managing the two UPPCL PF trusts.
Last month, the EOW had arrested then UPPCL managing director A P Mishra (now retired), apart from suspended officials Praveen Kumar Gupta and Sudhanshu Dwivedi in the high profile case. Those arrested also included chartered accounts (CA) and owners of brokerage or bogus investment firms.
Some of the accused operated multiple brokerages, many of which were floated solely for the purpose of getting commissions by fixing unscrupulous investment deals.
Last month, the Adityanath government had undertaken to ensure payment of the outstanding investment with DHFL, in case the tainted non-banking financial company (NBFC) failed to fulfill its commitment.
The state would first explore legal avenues to secure the PF investment in DHFL, failing which the UPPCL would be asked to arrange funds from its own resources to repatriate the corpus. In case the power utility failed to mobilise funds, the government would then offer an interest-free loan to UPPCL to make up for the purported loss.
While Rs 4,122 crore was invested in DHFL, the PF corpus was also parked in LIC Housing Finance and PNB Housing Finance with the investments in the three NBFCs totalling Rs 6,600 crore.
Meanwhile, the state government has also begun disinvesting the PF corpus in LIC Housing and PNB Housing.