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Haldia Petro's PF default just a `procedural glitch'

Our Bureau

KOLKATA, July 31

THE surprise entry of Haldia Petrochemicals Ltd (HPL) in the list of provident fund (PF) defaulters - in the company of a clutch of jute companies, former blue-chips such as Dunlop and Shaw Wallace, and ailing PSUs - is being described as a ``procedural glitch'' by the HPL management.

Company sources told Business Line that the State Industry Minister as well as the Labour Minister have been given a status report on the actual position.

Mr Richard B. Saldanha, Managing Director, categorically maintained that ``HPL has no provident fund default whatsoever''. The joint venture HPL is co-owned by the West Bengal Government, The Chatterjee Group and the Tatas.

HPL's travails began with a report in `Labour in West Bengal, 2000', an annual publication of the State Labour Department. A fact-sheet on PF defaults by exempted-sector establishments till December 2000 listed 59 companies whose total default added up t o Rs 212.75 crore. HPL's default was shown as Rs 53.29 lakh.

Other well-known companies in this list are: The two Manu Chhabria outfits - Shaw Wallace and Dunlop (total default Rs 3.82 crore), Burn Standard (Rs 13 crore), Jessop (Rs 17.9 crore) and Hindustan Cables (Rs 5.2 crore).

Needless to say, the jute sector has contributed hugely to the default position with the PSU National Jute Manufacturing Corporation Ltd accounting for Rs 41.7 crore.

Explaining HPL's position, sources said the default amount, representing the contribution of management-category employees and employers, was deposited with a trust, the Haldia Petrochemicals PF Institution, between 1985 and May 2000.

HPL, which has on its rolls 500 management employees and 350 non-management staff, had planned to deposit its management PF in the trust while depositing the non-management PF with the Employees Provident Fund Organisation (EPFO). It was making individua l applications for exemption for each of the management employees.

However, the EPFO held that till the exempted status was actually granted to HPL, it could not keep the money in the trust and asked for the money to be deposited with the organisation.

HPL maintained that it had already invested the money and could not ``risk returns by breaking the investments''. However, this became a matter of dispute which subsequently resulted in HPL featuring in the list of defaulters.