Jharkhand HC orders CBI probe into Rs 727.67 crore loss in coal workers PF investment

Ranchi: The Jharkhand High Court on Thursday ordered a CBI probe into the loss of Rs 727.67 crore from provident fund money belonging to employees of coal companies after Rs 1,300 crore was invested in Dewan Housing Finance Corporation Limited (DHFL), which later went bankrupt.

A division bench headed by Chief Justice M.S. Sonak passed the order while hearing a PIL filed by the Coal Employee Welfare Association.

The court disposed of the petition after ordering the CBI probe.

The case relates to an investment of Rs 1,300 crore made by the Coal Mines Provident Fund Organisation (CMPFO) in DHFL. The housing finance company subsequently went bankrupt, resulting in a loss of Rs 727.67 crore from CMPFO's investment.

The petition filed by an organisation representing coal company workers alleged that the investment was not withdrawn in time despite warnings about DHFL's deteriorating financial condition.

According to the petition, CMPFO's fund managers, the State Bank of India (SBI) and UTI, had flagged concerns over DHFL’s financial health as early as June 24, 2019. They had warned that the company could run into trouble and advised that the investment be withdrawn.

However, the petition alleged that no timely action was taken despite the warning. DHFL subsequently went bankrupt, resulting in the loss of Rs 727.67 crore of CMPFO funds.

Nearly six months later, on December 20, 2019, the CMPFO held a meeting in which a proposal was passed to withdraw the investment from DHFL. By then, however, the extent of the loss had already become known.

Nearly two years later, on November 22, 2021, an investment-related sub-committee of the CMPFO board met, and a proposal was placed before it to write off Rs 727.67 crore. Employees opposed this proposal.

The matter did not end there. In a bid to make up for the loss, the Coal India Board of Directors had also proposed imposing a cess of Rs 10 per tonne on coal production.

Departmental proceedings were also initiated against then Coal Secretary Animesh Bharti in connection with the matter.

The petition alleged that even before the departmental proceedings report was received, the CMPFO filed an affidavit before the High Court giving a clean chit to its officials. The High Court took serious note of the move.

The petitioner had sought a CBI investigation into the entire matter as well as recovery of the Rs 727.67 crore that was lost.

Advocate Anil Kumar Singh represented the petitioner before the court.

After the High Court passed the order for a CBI probe, the procedures followed while deciding to invest such a large amount in DHFL, the reasons for the delay in withdrawing the money despite warnings, and who should be held responsible for the Rs 727.67 crore loss – all this will be examined.

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