Top EPFO officials face action

Days after retirement fund body Employees' Provident Fund Organisation (EPFO) issued guidelines to stop its officials from striking deals with employers on the provident fund they ought to pay, top EPFO officials in Andhra Pradesh are facing action.

Last week, the Ministry of Labour and Employment suspended the second in command in EPFO's Hyderabad office.

EPFO officials said that this was an old case and not the result of the guidelines, which asked PF officials to stop accepting payments of provident fund in bulk on the basis of negotiations rather than in the name of each worker. But the suspension of P Sudhakar Babu, the second senior most officer in EPFO in a Rs 72-crore (Rs 720 million) PF scam related to Andhra Pradesh-based Chaitanya Group of Educational Institutions, is seen as a sign of more such actions in future.

The case was being investigated by the Central Bureau of Investigation's (CBI) Anti-Corruption Bureau, Hyderabad, which requested for his suspension.

The action against Sudhakar Babu had been recommended by the EPFO three years ago and it's an old case of arbitrary payment of PF contributions based on negotiations, said sources.

EPFO to update PF a/cs
EPFO, which has launched e-passbook service to enable its over 5 crore (50 million) members to access monthly update of their accounts online, is yet to update 94.13 lakh (9.4 million) accounts for 2011-12 by March end.

Taking a serious view of the slow progress, EPFO has asked its field staff to update all PF accounts for 2011-12 by March end.

The action against Sudhakar Babu had been recommended by the EPFO three years ago and it's an old case of arbitrary payment of PF contributions based on negotiations, said sources.

Sudhakar Babu was earlier Additional Central PF Commissioner in Hyderabad and was later transferred to Karnataka and Goa. He was suspended on the basis of a request by the CBI, which had filed a first information report (FIR) last September against Sudhakar Babu and four regional PF commissioners - G R Suchindernath, K S Arya, A Ravi Kumar, and S S Shastry.

An FIR filed in 2006 said that these five PF officials conducted raids at various offices of Chaitanya Group and found discrepancies worth Rs 72 crore. The Group was deducting PF from salaries, but the payments were less by Rs 72 crore. However, instead of recovering this amount, the PF officials sought to strike a deal with the institution, the FIR said.

According to sources, the case is an example of arbitrary payments of provident fund contributions based on negotiations between the PF officials and the institution rather than what each employee had contributed. Such negotiated provident fund figures often result in different numbers arrived at by different parties and attract the suspicion of vigilance agencies such as the CBI, said EPFO sources.

Recently, EPFO asked security service provider G4S Secure Solutions to pay Rs 133.76 crore (Rs 1.34 billion) on behalf of its employees.

While passing the order against G4S, EPFO said that the company and its management "has indulged in subterfuge to deprive all of its employees of their rightful social security benefits". However, this was not a case of 'negotiations', but of the contribution not being calculated properly. EPFO accused the company of creating fake allowances to reduce their liability to pay provident fund to workers.