Business & Finance

What a rot!

EPFO is a central government organisation and despite having unending procedures and controls on paper, there is such rampant mismanagement of its funds.

 

An internal audit of the EPFO, the giant body that manages the PF and pension money of the general public, with a fund base of Rs.11 lakh crores and growing, shows a disturbing state of affairs. There is clear evidence of rampant mismanagement and frauds, in the handling of our retirement funds. The discrepancies found during the internal audit include multiple payments in many cases, accidentally transferring the balance of one person to another and its illegal withdrawal, excess payments to persons, lack of control over undisbursed amounts, pension paid to non existent individuals, investments in substandard securities that endanger its corpus, and major compliance irregularities, which indicate a criminal misuse of funds of the general public.

These funds belong to 45 million PF/pension subscribers and impact crores of persons, which are members of their family. EPFO is a central government organisation and it is surprising that despite having unending procedures and controls on paper, there is such a rampant and fraudulent mismanagement of its funds and state of affairs.

The next one in the news for blatant misuse of public funds is the PMC Coop. Bank, which is facing a crisis, primarily because it illegally granted loans of over Rs.2500 crores to HDIL, a tainted and bankrupt builder, putting public savings and funds in jeopardy. The bank gave 30% of its loans/advances to one single party, in clear violation of the RBI guidelines.

At times such loans were given without the approval of its board of directors and its former MD says that this reality was hidden from the RBI for many years until matters want out of hand. It is very apparent that these shocking loans to HDIL involve corruption and criminal misuse of public funds.

Yet another current news about the misuse and siphoning of public money relates to the Delhi HC directing the RBI and SEBI to investigate charges of huge siphoning of funds, by the promoters of India Bulls, running into tens of thousands of crores, by forming shell entities and diverting funds into their own entities. The charges involve serious instances of tax evasion, money laundering, round-tripping of funds and defrauding the company by the directors of India Bulls.

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