NEW DELHI: The Public Accounts Committee has pulled up Coal Mines Provident Fund Organisation and coal ministry over their failure in dealing with the Rs 1,390 crore investment by the PF body in beleaguered Dewan Housing Finance Company .
In its report, the panel said that CMPFO could have exercised the option for early redemption of non-convertible debentures of Rs 864 crore, but failed to do so. The investments were made between 2015 and 2018 and the decision to redeem the debentures was exercised in Dec 2019.
The ministry has blamed the "lackadaisical approach" of the Coal Mines Provident Fund Organisation commissioner for not immediately placing the issue before the board of trustees despite the joint secretary in the ministry advising to do so.
"The committee also note that Dewan Housing Finance Company was already involved in misappropriation of funds with other States also right from 2015. The committee are distressed to note that despite ill knowing the status of DHFL, the Union coal ministry did not have the processes and procedure to gauge the gravity of the situation so as to prevent investment of pensioner's money in such bond," PAC stated.
Of the total investment, the National Company Law Tribunal has so far has given Rs 662 crore, and there is loss of Rs 316 crore along with balance NCDs of Rs 526 crore. "...there has been a critical irregularity on the part of the ministry to oversee the functioning of CMFPO which led to the failure to ensure the safety of its investments due to lackadaisical approach in redeeming debentures of DHFL despite adverse credit ratings... The ministry need to explore avenues like asset recovery , additional claims, or even working with the current management or bidders for further resolution. The committee, therefore, are of the opinion that in light of the avoidable loss, CMPFO should evaluate its future investment strategies ," PAC stated.
In its report, the panel said that CMPFO could have exercised the option for early redemption of non-convertible debentures of Rs 864 crore, but failed to do so. The investments were made between 2015 and 2018 and the decision to redeem the debentures was exercised in Dec 2019.
The ministry has blamed the "lackadaisical approach" of the Coal Mines Provident Fund Organisation commissioner for not immediately placing the issue before the board of trustees despite the joint secretary in the ministry advising to do so.
"The committee also note that Dewan Housing Finance Company was already involved in misappropriation of funds with other States also right from 2015. The committee are distressed to note that despite ill knowing the status of DHFL, the Union coal ministry did not have the processes and procedure to gauge the gravity of the situation so as to prevent investment of pensioner's money in such bond," PAC stated.
Of the total investment, the National Company Law Tribunal has so far has given Rs 662 crore, and there is loss of Rs 316 crore along with balance NCDs of Rs 526 crore. "...there has been a critical irregularity on the part of the ministry to oversee the functioning of CMFPO which led to the failure to ensure the safety of its investments due to lackadaisical approach in redeeming debentures of DHFL despite adverse credit ratings... The ministry need to explore avenues like asset recovery , additional claims, or even working with the current management or bidders for further resolution. The committee, therefore, are of the opinion that in light of the avoidable loss, CMPFO should evaluate its future investment strategies ," PAC stated.
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