E-Paper
UPPCL seeks ₹2,200-crore bailout from state govt to replenish PF fund
The move follows the corporation’s prolonged legal battle to recover the amount lost due to imprudent investment of employees’ provident fund money in a private bank
LUCKNOW Over five years after suffering a financial loss of approximately ₹2,200 crore due to imprudent investment of employees’ provident fund money in a private bank that later went insolvent, the UP Power Corporation Limited (UPPCL) is now seeking a bailout from the state government.
The corporation has demanded interest-free loan of ₹2,200 crore to replenish the employees’ trust fund and meet the liabilities. The move follows UPPCL’s prolonged legal battle to recover the lost amount, which remains unresolved. according to officials.
“It is true we have written to the state government to provide us an interest-free loan of around ₹2,200 crore - the amount that was lost due investment in the Mumbai-based DHFL, a private bank that has been declared insolvent,” said UPPCL director (finance) SK Narang.
He said the loan amount, if sanctioned by the government, would be put in the trust only to meet employees’ emergency financial needs, etc.
A former trust secretary said the UPPCL/Trust might invest the loan from the government in financial institutions to earn interest thereon.
The issue stems from UPPCL’s controversial decision to invest employees’ provident and pension funds into the now-defunct private bank - DHFL - between March 2017 and September 2019. The UPPCL PF Trust invested ₹2631.20 crore in the form of 319 FDs with the DHFL, a Mumbai-based housing finance company, allegedly in violation of the Central government’s investment guidelines.
In 2022, the UPPCL management had dismissed former secretary, Provident Fund (PF) Trust, PK Gupta two days before his retirement and forfeited pension benefits available to former director, finance, Sudhanshu Dwivedi, apart from ordering recovery of ₹922 crore each from both the accused in what is called the PF scam.
The third prime accused and former UPPCL managing director AP Mishra moved out of jail on bail in 2022 after remaining behind bars for months. The CBI, which took over the investigation from the state’s Economic Offences Wing (EOW) then, is yet to file a charge-sheet against Mishra or others.
The UPPCL lost its case in the National Company Law Tribunal (NCLT) in June 2021 and later in the National Company Law Appellate Tribunal (NCLAT) as well for getting the full refund with interest from the broke DHFL.
The corporation’s plea against the NCLAT’s order has been pending undisposed in the Supreme Court for more than a year. However, UPPCL officials admit that even a favourable verdict from the apex court may not resolve the crisis, as the Mumbai-based bank in which the funds were invested has already declared insolvency.
The alleged scam came in public domain in October-November 2019, after the then UPPCL chairman ordered a departmental probe on receiving an anonymous complaint.
