Ranchi: The Jharkhand High Court has ordered a Central Bureau of Investigation probe into the loss of Rs 727.67 crore from the provident fund of coal workers, following investments made by the Coal Mines Provident Fund Organisation in Dewan Housing Finance Corporation Limited. A division bench headed by Chief Justice M.S. Sonak issued the directive while hearing a public interest litigation filed by Sanjeev Srivastava of the Coal Employees Welfare Association, before disposing of the petition. The court’s order brings under federal scrutiny an investment of approximately Rs 1,300 crore made in DHFL, which resulted in massive financial losses after the housing finance firm collapsed into insolvency.
Fund Managers’ Red Alert Ignored for Months
The central agency will examine the decision-making process and the substantial delays in taking protective measures. In June 2019, the fund managers handling the portfolio, State Bank of India and UTI, issued a red alert warning CMPFO about the deteriorating financial health of DHFL. Both managers formally advised the organisation in writing to withdraw the investments immediately.
Despite the explicit alerts, the concerned officials and the board of trustees allegedly took no immediate action. A formal resolution to withdraw the funds was passed only on December 20, 2019, nearly six months after the red alert when the insolvency crisis had already deepened. By that time, the prospects of recovering the retirement savings had shrunk significantly, leaving the workers’ corpus severely impaired.
Controversy Over Write-Off Proposal and Clean Chit
The handling of the financial shortfall further intensified when the investment subcommittee under the board of trustees considered a proposal on November 22, 2021, to write off the lost amount. The proposal met with stiff resistance from employees and trade union representatives, though allegations emerged that their objections failed to yield corrective steps. To bridge the gap, the board of Coal India reportedly considered imposing a cess of Rs 10 per tonne of coal production, raising concerns over passing the burden of failed investment decisions onto the wider sector.
The scrutiny deepened after allegations surfaced that CMPFO submitted an affidavit before the High Court exonerating key officials, including former Coal Secretary Animesh Bharti, before departmental inquiry proceedings had reached their formal conclusion. The premature clearance of officials prior to final departmental findings formed a critical ground for the court intervention.
Probe Focuses on Accountability Amid Pension Shortfall
The CBI inquiry comes at a vulnerable moment for the organisation, as CMPFO’s pension fund already faces an estimated annual deficit of Rs 240 crore, prompting proposals to raise resources through asset monetisation. Advocate Anil Kumar Singh, appearing for the petitioner, had demanded investigations by both the CBI and the Enforcement Directorate, alongside concrete recovery measures. The probe will now examine the roles of the former Coal Secretary, the then CMPFO Commissioner, and other trustees to fix administrative and criminal responsibility.
Follow for daily updates on cybercrime, corporate fraud, DFIR, hacking, investigations, and digital forensics
