The Public Accounts Committee (PAC) has strongly criticized the Coal Mines Provident Fund Organisation (CMPFO) and the coal ministry for their mismanagement of a ₹1,390 crore investment in Dewan Housing Finance Company (DHFL), which is currently facing financial difficulties. The PAC has expressed its dissatisfaction with the "lackadaisical approach" taken by both the CMPFO and the ministry in handling the investment.
The committee's report highlights that the CMPFO had the opportunity to redeem non-convertible debentures worth ₹864 crore early but failed to do so. The investments were made between 2015 and 2018, but the decision to redeem the debentures was only made in December 2019. The coal ministry has attributed this failure to the CMPFO commissioner's "lackadaisical approach," stating that the commissioner did not promptly bring the matter before the board of trustees, despite advice from the joint secretary in the ministry to do so.
The PAC also noted that DHFL was already involved in misappropriation of funds with other states from 2015. Despite being aware of DHFL's precarious financial situation, the Union coal ministry lacked the necessary processes and procedures to assess the gravity of the situation and prevent the investment of pensioners' money in such bonds.
As of now, the National Company Law Tribunal (NCLT) has recovered ₹662 crore of the total investment. However, a loss of ₹316 crore has been incurred, and the remaining non-convertible debentures (NCDs) are valued at ₹526 crore. The PAC has emphasized a critical oversight on the part of the ministry in supervising the CMFPO's operations, which led to the failure to protect its investments due to a lack of diligence in redeeming DHFL's debentures, despite adverse credit ratings.
The PAC has urged the ministry to explore avenues such as asset recovery, additional claims, or collaboration with the current management or bidders for further resolution. The committee believes that the CMPFO should re-evaluate its future investment strategies in light of the avoidable loss.
