Hyd company failed to deposit ₹130-crore EPF contributions over four years: Inquiry
HYDERABAD: Hyderabad-based infrastructure company MW High Tech Projects India Private Limited allegedly didn’t deposit provident fund contributions to the tune of ₹129.75crore on behalf of hundreds of employees over the past four years, according to an interim report submitted by an inquiry commission formed by the Employees’ Provident Fund Organisation. A copy of the report was reviewed by HT.
The six-member inquiry commission was set up in late 2016 following a complaint filed by whistleblower, Abhishek Mishra, who joined the company, a subsidiary of German engineering and construction company M+W Group GmbH, in March 2016.
Mishra also moved other regulatory authorities including the Income Tax (I-T) department over alleged irregularities in the Tax Deduction at Source (TDS) of its employees.
The inquiry by the PF authorities, which progressed at a snail’s pace, picked up pace only in the last six months after Mishra started knocking on the doors of every ministry and department in Delhi seeking to expose the alleged irregularities.
In its latest report submitted to the Regional Provident Commissioner, Hyderabad, on July 20, the inquiry commission pointed out that the company had taken up major construction projects which included those of Infosys Ltd,the local units of Mondelez International, Michelin Procter & Gamble and Mylan.
During this period, the company had deducted provident fund to the extent of ₹261.72 crore from the salaries of employees and workers between the financial years 2012-13 and 2015-16, but remitted only ₹131.97 crore towards EPF contributions. “There has been no compliance from the company with regard to the remaining ₹129.75 crore,” the report said.
The inquiry commission also found a huge difference in the profit and loss accounts and the general ledgers. The amount shown towards the TDS deductions
THE INQUIRY PICKED UP PACE ONLY IN THE LAST SIX MONTHS AFTER THE WHISTLEBLOWER STARTED KNOCKING ON THE DOORS OF EVERY MINISTRY IN DELHI
with regard to contract work expenses, cost of services and other expenses during the four years was much more than the actual TDS, it pointed out.
Inquiries with the regional provident fund authorities revealed that the company had 963 employees till October 2017. However, there is no information about the actual employee strength of the company, which operates through different contractors and sub-contractors in different parts of the country; each contractor has a different provident fund code.
A report submitted by the inquiry commission to the regional provident fund authorities on March 7, 2018 revealed that none of the top officials of the company was present when the commission members went to its offices at the financial district in Hyderabad on March 5 to conduct search and seizure operations.
Lower-rung officials of the company told members of the commission they had no access to any of the records including payment vouchers. They also refused to divulge the password to commission members when they asked for access to digital data of financial activities saved on computers or on the cloud. It was only when the commission members insisted that they were allowed access through an authorised person. Commission members failed to get access to the information because of a server problem, the inquiry report said.
The company officials told them that they would send the relevant data to the PF office later in the day. “It was surprising why the inquiry panel returned empty handed when they could as well seize the laptops available with the company,” Mishra said.
He added, “Several thousand people are deprived of their rightful income because of greed of few individuals. My efforts won’t stop till the last paisa of India is recovered.” Later, company officials sent two truck-loads of various documents and records packed in 121 cartons to the regional provident fund office, without any covering letter specifying the nature of those records.
Efforts to reach out to the company failed. The company’s director and chief financial officer Dilip Nemchand Gada could not be reached on his phone and did not respond to text messages. Queries e-mailed to the company elicited no response.
Regional Provident Fund commissioner Bhola Chandrasekhar refused to disclose any information on the ongoing inquiry.