Several
top-ranking multinational companies had invested their provident and
pension funds in the now toxic bonds of Infrastructure Leasing and
Financial Services (ILFS) putting the hard-earned money of these firms'
employees at risk, reports suggest. A supplementary affidavit filed by
the Ministry of Corporate Affairs (MCA) before the National Company Law
Appellate Tribunal (NCLAT) earlier this week showed that as many as
1,400 firms have a total exposure of Rs 9,700 crore in the toxic
IL&FS bonds, a report by news agency IANS said. This corpus of funds
comes
from lakhs of employee provident and pension funds from these
companies.
The MCA affidavit filed on April 8 shows major
investment banks, tech companies, pharmaceutical firms and airlines
embroiled in the IL&FS toxic bond pandemic. The names include Bata
India employees statutory PF, Glaxo India, Otis Elevator, Sumitomo
Indian Staff PF, McCann Erickson India EPF, Lufthansa German Airlines
employees local PF, BASF, Novartis, Pernod Ricard, Bechtel India, JP
Morgan, Nestle, Texas Instruments India, Volvo India, Cisco Systems
India, Sanofi India, Sapient Consulting, BBC Worldwide India, McKinsey
Knowledge Centre and Shell India, IANS reported.
The
long list of investors also includes names like the Canadian High
Commission India Staff, American Embassy School PF, Barclays Bank Plc
India, American Express India, Societe Generale EPF, British Airways,
Philips, Alcatel Lucent, Mercedes Benz R&D India, Procter &
Gamble Executive Pension Plan, Adobe Systems, HP Globalsoft,
Schlumberger, CapGemini, Cadbury India, Goodricke Group, Gillette.
Many
of the companies have multiple exposures, the report said. Otis has
several entries with amounts varying from Rs 55 lakh to Rs 2 crore over
different years, the IANS report said. The list compiled by MCA reflects
the status December 31, 2018. Worryingly, the MNCs and their employees
fall under the category of unsecured creditors, and their investments
are completely unprotected due to the level of toxicity.
There has
been no initiative to start a repayment process against the exposure of
these MNCs, apart from the April 8 order by NCLAT which called for
prioritising the provident and pension funds stuck in the IL&FS
bonds.
"Provident
fund and pension fund have nothing to do with this, this is not your
money, it is related to the employees. We want that it should be
released first," a two-member NCLAT bench headed by Justice S J
Mukhopadhaya had said earlier this week.
However, the government
does not want any preferential treatment for provident and pension funds
as it is likely to upset other creditors, the report said.
Meanwhile,
the Serious Fraud Investigation Office (SFIO) arrested former MD and
CEO of IL&FS Financial Services (IFIN) Ramesh Bawa on charges of
fraud. The action against Bawa came after the Supreme Court refused to
extend him protection from being apprehended.