EPFO serves showcause notice to NTC

The Employees Provident Fund Organisation (EPFO) has issued a showcause notice to the National Textile Corporation's General Manager (Technical), V D Zope for the alleged removal of Model Mills assets which were attached by the Provident Fund (PF) office.

Model Mills is an NTC unit. The assets were attached to recover the provident fund dues owed by the mills.

The notice asks as to why a first information report (FIR) not be filed against Zope and other officials for what EPFO sees as an attempt to steal goods it had attached.

D P Deoras, general manager of Model Mills, A B Sahane, assistant manager and V T Wankhede, a former employee of the Mills who was made the custodian of the attached goods were also served with the notice. All of them have been given three days time for responding to the notice.

Abhay Ranjan, the regional Provident Fund Commissioner, said that removal of attached assets can be a very serious crime under the Provident Fund laws. He added that the NTC officials were trying to transfer five carding machines and 100 card cans to another NTC unit, Soddhpur Mills in West Bengal.

The PF office also has a copy of the letter issued from NTC's Mumbai office directing the transfer of these machines. Sources said that the carding machines and cans are key components in pre-spinning process.

The attempt to transfer these machines was made on Saturday night. However, acting on a tip-off a PF team reached the site and foiled the transfers. The trucks in which the machines were being transported have also been seized by the EPFO.

Two of the trucks were registered in West Bengal, while another had a local passing permit. Ranjan said that the mill management was under an obligation to first retire PF dues of workers and then decide on what they wanted to do with additional assets.

The assets that they were trying to transfer could have been disposed by the PF office to recover the employees' dues, he maintained.

Model Mills' which has an exempted PF trust has a PF liability of around Rs 5.25 crore.

In an exempted trust, the money collected as PF corpus can be managed by an independent trust instead of the EPFO itself. However, the investment has to be done in line with the EPFO pattern and the interest rates should not be below than what is being offered by the EPFO.

Though the trust in Model Mills did not fail in collecting the contribution amount, there was a shortfall in interest declaration by 2 per cent. As a result, the trust is liable to pay the difference as well as damages imposed by the EPFO on such amount.

Model Mills was taken over by the NTC in 1974. However, the management retrenched all employees in December 2003 as the company incurred even heavier losses. The President of Rashtriya Mill Mazdoor Sangh (RMMS) Haribhau Naik has thanked the PF office for this action.