Averting a major showdown with the Uttar Pradesh power employees on the illegal investment of their provident fund (PF) in Dewan Housing Finance Corporation Limited (DHFL), the Yogi Adityanath government has announced to underwrite the outstanding corpus.
Besides, the state has also started the process of disinvesting the PF corpus in two other non-banking finance companies as well — LIC Housing Finance and PNB Housing Finance, which would be invested in other public sector financial institutions as per norms.
While Rs 4,122 crore was invested in DHFL alone by the two trusts managing the PF of the power employees between March 2017 and December 2018, about Rs 2,267 crore is still to be repaid by the company, which has been barred by the Bombay High Court from making fresh repayments.
The employees had been demanding the state to issue a gazette notification undertaking to ensure repayment of the corpus in DHFL, which is being probed by the enforcement directorate for money laundering. While the employees had observed 48 hour ‘work boycott’ on November 18-19, they had further announced to proceed on indefinite stir beginning November 28, if the state government failed to concede to their demands.
Yesterday, UP power principal secretary Arvind Kumar held a meeting with the representatives of the 45,000 power employees, wherein he apprised them of the decision taken by the state government regarding taking over the responsibility of repayment in case DHFL defaulted on its commitment.
According to the UP Government Order, the state would first harness legal avenues to secure the PF investment in DHFL, failing which the UP Power Corporation Limited (UPPCL) would be asked to arrange funds out of its own resources to repatriate the corpus. In case, the power utility failed to mobilise funds, the state government would offer interest free loan to the UPPCL to make up for the purported loss.
The UP power employees joint action committee announced to defer its stir.
According to sources, while Rs 4,122 crore was invested in DHFL alone, PF investments were also parked in LIC Housing and PNB Housing with the investments in the three NBFCs to the tune of almost Rs 6,600 crore.
The power employees apprehended losing their entire corpus after the Reserve Bank of India (RBI) on Wednesday superseded the board of DHFL and appointed a former banker as the administrator of the beleaguered company, once considered a shining star in the league of private sector mortgagor. Since, DHFL investments were made after flouting norms, the government had recommended a CBI probe with the state economic offenses wing (EOW) probing the case till the central agency takes over. So far, five persons, including three retired and serving UPPCL officials, have been arrested in the case.