Jharkhand HC Orders CBI Probe Into Rs 727.67-Crore Loss of Coal Workers’ PF Funds

The Jharkhand High Court has ordered a CBI investigation into the loss of Rs 727.67 crore from provident fund money belonging to coal company employees following an investment of Rs 1,300 crore 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 Public Interest Litigation (PIL) filed by the Coal Employee Welfare Association. The court disposed of the petition after directing the CBI to investigate the matter.

The case concerns the investment of Rs 1,300 crore by the Coal Mines Provident Fund Organisation (CMPFO) in DHFL. The subsequent collapse of the housing finance company resulted in a reported loss of Rs 727.67 crore from CMPFO funds.

The petition alleged that the investment was not withdrawn despite warnings about DHFL’s deteriorating financial condition. According to the petition, CMPFO’s fund managers, State Bank of India (SBI) and UTI, had raised concerns about the company’s financial health as early as June 24, 2019, and advised that the investment be withdrawn.

However, the petition alleged that no timely action was taken. On December 20, 2019, nearly six months after the warnings, a CMPFO meeting approved a proposal to withdraw the investment, by which time the extent of the loss had already emerged.

The matter resurfaced on November 22, 2021, when an investment-related sub-committee of the CMPFO board considered a proposal to write off the Rs 727.67 crore loss. Employees opposed the proposal.

In another effort to make up for the loss, the Coal India Board of Directors had 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 CMPFO filed an affidavit before the High Court giving a clean chit to its officials even before the departmental proceedings report was received.

The High Court took serious note of the development and has now ordered the CBI probe sought by the petitioner.

Advocate Anil Kumar Singh represented the Coal Employee Welfare Association. The CBI investigation will examine the process followed in approving the Rs 1,300-crore investment, the alleged delay in withdrawing the funds despite warnings, and responsibility for the Rs 727.67-crore loss.