15 lakh salaried employees with PF accounts stuck with toxic IL&FS bonds
A new threat looms large for the government in an election year. A spanking new but restive community of salaried employees is concerned about its money deposited with the Employees Provident Fund Organisation (EPFO).
 
At the cutting edge of the ever burgeoning IL&FS crisis, these employees are exposed to toxic investments. Most of these Employee Provident Funds and Employee Pension Funds have stated that the IL&FS resolution plan must provide repayment before secured creditors as the resolution framework proposed by the company doesn't provide for any payment to secured creditors. 
 
A sense of panic has crept in. They have collectively invested thousands of crores of rupees in IL&FS bonds. Many say that the resolution framework must balance interest of all stakeholders. Others have also challenged Sec 53 of the payment schedule distribution process as it doesn't address public and social interest. Since these are tradeable instruments, the exact quantum is not known, but investment bankers estimate it to be in thousands of crores since the infrastructure company's bonds - which were 'AAA' rated - were preferred by retirement funds that have a low-risk appetite but still have to get assured returns even when interest rates are low.
 
The growing discontent is across some of the blue chip Indian corporates. Some of these that have filed an intervening petition with the tribunal, thereby impleading themselves in this gargantuan case on how to run a corporate into the ground, include Apco Infratech, Apco, Titan, Asian Paints PF, Asian Paints Management Cadre Superannuation scheme, Aditya Birla Sun Life MF, Thomas Cook PF, Titan Watches, Hindustan Unilever (HUL), M & M PF, Himami, Bajaj Finance, Hindalco EPF, Max Financial Services PF Trust, IDBI Trusteeship Services Ltd, IndusInd Bank, Hudco Employees CPF, MMTC CPF, 63 Moons, Nayara Energy EPF, Indian Oil Corp, ITPO, CIDCO, SBI PF, GUVNL PF, Ambuja Cement, HDFC AMC, IREDA among others. 
 
The size, scope and magnitude of these companies is self explanatory - HUL, Asian Paints, Hindalco and M & M from the private sector, IOC, SBI and MMTC from the PSU sphere and HDFC AMC and Aditya Birla Sun Life from the mutual fund industry, virtually imperilling India Inc and most importantly dragging the financial savings of lakhs of salaried employees.
 
The employee provident funds of various companies and other entities had invested in IL&FS bonds and bond holders are unsecured and may or may not get paid in the ongoing crisis at IL&FS. In any case, they are seen pretty much last on the priority list. Over 75 companies and their PFs have filed an intervening petition before the appellate court to seek directions and instructions on repayment to unsecured creditors. 
 
As many as 15 lakh salaried employees across different sectors are caught in this ticking time bomb and the number is only likely to go up as the true extent of the malaise is known and understood. Till September last year, Indian rating agencies, not realising that IL&FS was set to implode, were giving Triple A rating to the bonds. With elections around the corner, this new expose will further polarise debate. After all it is salaried employees who are now staking claim to their hard-earned monies. 
 
In fact, in the intervening petition filed by IndusInd Bank, they have categorically asserted that the top five creditors of IL&FS were not consulted in the resolution plan. Abhishek Manu Singhvi, senior counsel, with Diwakar Maheshwari, Avishkar Singhvi and Shreyas Edupuganti appeared for IndusInd Bank. Similarly, Abhishek Anand and Anant Pavgi appeared for Federal Bank while Vikram Hegde appeared for IREDA and Priya Puri appeared for Indian Oil Corp.
 
Abhishek Singhvi, Arun Kathpalia, Abhinav Vashisht, Amrendra Saran, Rajiv Datta appeared on behalf of the intevener (financial creditors or operational creditors or other secured creditors). The NCLAT order of February 11 allowed the intervening applications filed by them. Furthermore, other intervenors and parties who intend to file impleadment application were allowed before the next date - which is March 12, 4 p.m.
 
BOX Section 53 of IBSC
 
Notwithstanding anything to the contrary contained in any law enacted by Parliament or any State Legislature for the time being in force, the proceeds from the sale of the liquidation assets shall be distributed in the following order of priority and within such period and in such manner as may be specified, namely:
 
(a) the insolvency resolution process costs and the liquidation costs paid in full;
 
(b) the following debts which shall rank equally between and among the following:
 
(i) workmen's dues for the period of 24 months preceding the liquidation commencement date; and
 
(ii) debts owed to a secured creditor in the event such secured creditor has relinquished security in the manner set out in section 52;
 
(c) wages and any unpaid dues owed to employees other than workmen for the period of 12 months preceding the liquidation commencement date;
 
(d) financial debts owed to unsecured creditors;
 
(e) the following dues shall rank equally between and among the following:
 
(i) any amount due to the Central Government and the State Government including the amount to be received on account of the Consolidated Fund of India and the Consolidated Fund of a State, if any, in respect of the whole or any part of the period of two years preceding the liquidation commencement date;
 
(ii) debts owed to a secured creditor for any amount unpaid following the enforcement of security interest;
 
(f) any remaining debts and dues;
 
(g) preference shareholders, if any; and
 
(h) equity shareholders or partners, as the case may be.
 
(2) Any contractual arrangements between recipients under sub-section (1) with equal ranking, if disrupting the order of priority under that sub-section shall be disregarded by the liquidator.
 
(3) The fees payable to the liquidator shall be deducted proportionately from the proceeds payable to each class of recipients under sub-section (1), and the proceeds to the relevant recipient shall be distributed after such deduction.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    User

    COMMENTS

    Limbadri Lacharlla

    1 week ago

    Any update news for pacl amount refunded.

    B. Yerram Raju

    4 months ago

    Hereafter employees should not accept bonds in lieu of the payments by the Company.

    Mahesh S Bhatt

    6 months ago

    Enjoy the anarchy unfold Let Rajan Patel quit & Bank MD sustain Mahesh

    Ramesh Poapt

    6 months ago

    Financial Pulvaha!

    PACL: How to File Refund Claim Application
    Market regulator Securities and Exchange Board of India (SEBI) had said the Justice RM Lodha Committee has decided to allow investors to file claims for PACL Ltd. The claim application for refund from PACL can be filed till 30 April 2019.
     
    SEBI has created a separate website for accepting the claim forms from all investors of PACL who are seeking refund of their investment. To file the claim, the investor need to visit http://sebipaclrefund.co.in/ and submit her application. For submitting the claim, the investor needs to upload copy of her PAN card, latest passport size photo, copy of cancelled cheque, copy of PACL certificate and receipts, if any.
     
    For investors who have changed their names or nominees of the investor, who is no more or incapacitated, SEBI says it will announce later a separate window for submission of claim applications. Such investors need to regularly check SEBI website or the PACL page on SEBI website https://www.sebi.gov.in/PACL.html.  
     
    Here are 32 frequently asked questions (FAQs) on submitting claim for refund from PACL. These FAQs are provided by SEBI.
     
    FAQs to enable PACL investors submit their claims
     
    1.In  cases  where  holder  of  the  certificate  is  deceased,  whether  nominee  or  legal  heir  can apply  for  refund?  What  are  the  documents  required  for  a  nominee  to  apply  for  PACL refund?
     
    The  current process  does  not  envisage  a  claim  application  being  made  by  a  nominee  or  a legal  heir.  Accordingly, only  application  for  self  can  be  made  in  the  current  process.  Any decision, if taken by the Committee, with respect to the receipt of claim applications from nominees or legal heirs, shall be notified in due course.
     
    2.Name on PAN card differs from that provided in the PACL certificate(s). What needs to be done in that case?
     
    You can make a claim application even if the Name on the PAN card differs with the Name appearing  in  the  PACL  certificate(s).  You  have  to  enter  your  Name  as  mentioned  on  the PAN card in the field for PAN Name, the Name as appearing in the PACL certificate in the field for PACL Certificate Name and upload the supporting documents in the field provided.
     
    3.The investment is in the name of minor who does not have a PAN Card. What needs to be done in that case?
     
    The documentary proofs as prescribed have to be submitted with the claim application, for the  said  claim  application  to  be  a  valid  application.  Hence,  you  need  to  apply  for  a  PAN Card  in  the  name  of  the  minor. The  Income  Tax  Department  has  not  mentioned  an  age limit for availing a PAN card, which means that even minors are eligible to apply for it.
     
    4.When will the money be refunded? Will money be refunded with interest?
     
    The decision of refund shall be taken by the Committee after verifying the claims made by the  applicant  investor(s). The  Committee  will  refund  the  amount(s)  invested,  depending upon  the  corpus  available  with  the Committee,  on  the  basis  to  be  decided  by  the Committee. Payment of interest is not envisaged at this stage.
     
    5.How  is  the  claim  amount  that  is  to  be  entered  in  the  claim  application  form  to  be calculated? Can an investor input the maturity amount as the claim amount?
     
    The  claim  amount  is  the  total  amount  that  is  derived  upon  adding  the  amounts  as appearing  in  all  the  outstanding  receipts  of  payment  with  respect  to  a  particular  PACL Registration Number. The claim amount so entered by the investor in the claim applicati on form  is  required  to  be  supported  by  uploading  the  scanned  copy  of  the  corresponding certificate  issued  by  PACL  for  the  said  PACL  Registration number  along  with  the  scanned copy  (ies)  of  the  corresponding  outstanding  receipt  (s)  of  payment.  For  greater  clarity, please  refer  to  the  refund  video.  Further,  the  originals  of  the  scanned  copies  uploaded should be available with the investor. It is further clarified that the maturity amount is not the claim amount.
     
    6.Can  an  investor  who  does  not  possess  any  receipts  or  is  in  possession  of  only  a  few receipts or just the last receipt and/ or does not possess the bond certificate make a claim for refund? In which case, what would be the claim amount?
     
    The Committee has not envisaged any payments against lost or misplaced bond certificate (s) and/ or receipt(s) at this stage.
     
    7.In case original documents (bond certificates and/ or receipts) have been surrendered to PACL  and  investor  has  only  acknowledgement  issued  by  PACL,  can  he/she  apply  for refund?  
    Can  such  acknowledgement  slip  be  uploaded  in  lieu  of  PACL  certificate  while applying  for  refund?  If  investor  has  availed  loan  from  PACL  Ltd.  after  submitting  all  the documents to PACL, how to apply for refund in such a scenario?
     
    In  the  current  process  of  receiving  claim  applications,  the  investor  submitting  a  claim application should be in possession of the original bond certificate and original outstanding receipt(s) of payment, and shall upload the scanned copy of the bond certificate along with the  scanned   copies  of  the  outstanding   receipt(s).  
     
    Accordingly,   to   submit   a   claim application,  any  desirous  investor  shall  have  to  upload  the  scanned copies  of  the  above documents  and be  in  possession  of  the  respective  original  documents.  For  greater clarity, please refer to the refundvideo. The Committee has not envisaged any payments against any acknowledgement issued by PACL at this stage.
     
    8.Is there any upper limit on the number of receipts that can be uploaded?
     
    There  is no upper  limit on the  number  of  receipts  that  can be  uploaded. Accordingly,  you may upload as many number of receipts as may be outstanding with respect to a particular PACL Registration number.
     
    9.Is there an option to apply for PACL refund by submitting physical claim application?
     
    The  current  process  of  receiving  claimapplications  is  a  digital  process  considering  the magnitude  and  scale  of  the  process. Accordingly,  no  physical  claim  application  can  be submitted in the current process.
     
    10.Can those Investors who were unable to upload documents and make their claim during the  first  process (outstanding  principal  up  to  Rs.  2500/-)apply  again  in  the  current process?
     
    Yes. If you were unable to make your application in the previous process, you may do so in the  current  process,  provided,  you upload  the  scanned  copy  of  the  bond certificate  along with the scanned copies of the outstanding receipt(s) and are in possession of the original bond certificate and original outstanding receipt(s) of payment.
     
    11.Can an investor from a neighbouring country apply for refund with the other country ID & address proofs in lieu of PAN Card? Also, can an investor submit Aadhaar Card in lieu of PAN card?
     
    No.The documentary  proofs as prescribed  have to be submitted with the claim application, for the said claim application  to be a valid application. Accordingly, no documentary proofs, except the ones prescribed shall be considered.
     
    12.Can  an  investor  upload  scanned  copy  of  the  first  page  of  the  bank  pass  book  instead  of cancelled cheque/ Banker’s certificate?
     
    In case investors do not have a chequebook, they may get a certificate from the bankers in the  format  prescribed.  In  the  alternative,  the  investor  can  upload  that  front  page  of  the bank pass book and the page that contains the Investor’s Name, the Bank Account number and the IFSC Code.
     
    13.What can be done in case of error message, “This PACL number does not exist as per our records.”?
     
    In case you are holding original bond certificate (s) and corresponding original outstanding receipt  (s)  issued  by PACL,  and  while  filing  your  claim  application  you have  received  the aforesaid  message, you  may
    email  the  PACL  Registration  number  details  along  with  the scanned copy (ies) of the corresponding aforesaid 
    documents at [email protected]
    .
    14.Is the refund application website http://www.sebipaclrefund.co.in/accessible outside of India?
     
    Yes. The  refund  portal  has  now  been  made  accessible  from  outside  of  India  except Pakistan, China and Russia.
     
    15.What  can  be  done  to  update  information  in  the  portal  once  acknowledgement  number has already been generated?
     
    An acknowledgement   number is generated after the final submission of the claim application.Accordingly,no changes can be made after the generation of the acknowledgement number.
     
    16.Which web browser is to be used for this website?
     
    This websiteworks best withthe latest version of GoogleChrome browser.
     
    17.What is the process for registration of my claim?
     
    For  registration, youneed  to  enter your PACL  registration  number  twice,  mobile  number and captcha. On entering the details, an OTP would be sent to the mobile number entered during registration. Once the OTP is successfully entered and if the details submitted are in order, yourregistration  would  be  successful.Upon  successful  registration,  you  may  start the process of submitting your claim application.
     
    18.How do I login to my claim application?
     
    On  successful  registration, youwould  be  guided  to  a  password  creation  screen. Youcan create  a  password  of yourchoice. The  password  should be  between  8-16  characters  and containat  least one  upper case letter  (a-z),  one  numeral  (0-9)  and  one special  character. On  successful  creation  of  password,  subsequent logins  would need  to be  done using your PACL registration number and password.
     
    19.What information do I need to submitin the claim application form?
     
    Youneed to submit yourname as per PACL certificate, the claim amount(in Rs.), name as per PAN, PAN number, your bank account number, bank name and IFSC code.
     
    20.What are the documents that I need to upload?
     
    Youneed  to  upload  copy  of your PAN,  latest  passport  size  photograph,  copy  of  canceled cheque with  your  name  printed or banker’s certificateas  per  the  prescribed  format available  at  sebipaclrefund.co.in  on  the  letter  head  of  the  bank,  copy  of  PACL  certificate, and receipts, if any.
     
    21.Can I exit even though I have partially filled up the claim application form?
     
    Yes, you can exit the applicant by clicking on the logout button. The informati on entered by you would be saved when youclick on ‘Save and Next’ option.You can come later and log in to finish your claim application.
     
    22.What is the format of the documents to be uploaded?
     
    The documents can be uploaded in pdf, jpg or jpeg formats.
     
    23.What should be the specifications of the documents being uploaded?
     
    The  documents  uploaded  should  be  on black  and  white scale,  200  dpi  and  vertically aligned.The size of the document should be restricted to 300KB.
     
    24.How do I know if my application is successfully submitted?
     
    After completion of all the required formalities, you may click on the ‘Final Submit’ button, upon  which  a  preview screen  will  appear  for  confirmation  of  the  information  entered  by you  on  the  web  platform. Upon your  confirmation  of  the  information  entered,  the application  would  be  successfully  submitted  and  an  acknowledgement receipt  number (ARN)would  be  generated. This  number  along  with  the  PACL  
    registration  number  should be used for all future communication.
     
    25.Can I delete/edit the information I have saved?
     
    Youcan  edit/delete  the  information  multiple  times  till you  submit  your  application  by clicking on the ‘Final Submit’ button. However, once you have clicked on the ‘Final Submit’ button no further changes would be allowed.
     
    26.What if I forgot my password?
     
    Click on ‘Forgot Password’ option on this website. Enter the PACL registration number and click on generate OTP option. Enter the OTP received on your mobile number and click on submit  OTP.  Once  the  correct OTP has  been  submitted, youwould  be  taken to  the ‘Enter password’screen where youcan create a fresh password.
     
    27.What if I do not have a PAN card?
     
    You would need to obtain a PAN card and then submit the application?
     
    28.How do I obtain a PAN card?
     
    To obtain information on how to obtain a PAN card,click on the below link.https://www.incometaxindia.gov.in/Pages/tax-services/apply-for-pan.aspx
     
    29.What if I do not have a bank account where I am the first holder?
     
    You  can  submit  the  bank  account  details  where  you  are  a  joint  holder.  The canceled cheque copy with your name printed or banker’s certificate as per the prescribed format available at sebipaclrefund.co.in on the letter head of the bank also needs to be uploadedalong with the claim application
    .
    30.What  if  the  PACL  certificate  holder has  passed  away?
     
    Can  any  nominee  make  the  claim on behalf of such deceased investor?In such  acase,  the  claim  application  can  be  submitted  by  the  Nominee  whose name appears  on  the PACL  certificate. However,date  for  the  submission  of  claim  applications through nominees shall be notifiedin due course.
     
    31.What if my name has changed due to marriage?
     
    The date for the submission of claim applications in  your  new name together with supporting documents shall be notified in due course.
     
    32.In case of queries/complaints, where can I contact?
     
    In case of queries/complaints, please call the helpline number 022 61216966
     
    Here are the FAQs in Hindi...
     
     
    PACL clarification
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    COMMENTS

    sunilkumar singh

    5 months ago

    U258013277

    Sandeep Aiwale

    5 months ago

    sandeep

    rahul chauhan

    5 months ago

    Please anyone tell me, i upload all document in color mode. is it ok?

    vikash kumar

    5 months ago

    PACL ka 40 documents mere pass hai
    sbhi documents lod karne honge.

    Srisailam

    5 months ago

    how to apply amount refund plz tell me

    Srisailam

    5 months ago

    hoe to apply amount refund

    Ramya Sabapathi

    5 months ago

    Hello sir I have the PACL bond but don't have the receipt of 2 payment and also I lost the sim which I gave for pacl what should I do for this

    Chandu Flex

    5 months ago

    Sir I have Bond. But I have not receipts. What can I do sir

    NiKhil HeJerao

    5 months ago

    Anyone plz tell how to upload documents and which ?

    mr mp singh

    5 months ago

    Hay sar

    Premkumar Raut

    5 months ago

    my father invest money in PACL in my sister name but marriage purpose my sister name are change , which document are submit me for refund

    DINOOP XMAN

    5 months ago

    Sefi

    Murphy Lopez

    5 months ago

    DEAR SIR
    I HAVE ALREADY PLACED MY CLAIM PERTAINING THE REFUND AND IN CONFIRMATION I HAVE ALSO RECEIVED A REFERENCE NUMBER,WHAT IS TO BE DONE NEXT? AND HOW TO CHECK THE PROGRESS

    rahul chauhan

    5 months ago

    I also upload all documents in color mode, paisa mil jayega ya nahi

    REPLY

    NiKhil HeJerao

    In Reply to rahul chauhan 5 months ago

    Rahul chauhan plz tell me how to upload document and which document is upload ? ....plz

    Dhilip .S

    5 months ago

    i upload all document in color mode it is ok

    Sahara Q Shop Under SFIO Lens; SEBI refunds Rs98.56 crore to 12,522 Investors of SIRECL, SHICL
    Sahara group subsidiary Sahara Q Shop Unique Products Range Ltd is being probed by the Serious Fraud Investigation Office (SFIO) following complaints by 744 people, the Lok Sabha was informed. Separately, market regulator SEBI has refunded Rs98.56 crore, including interest to over 12,500 investors, shows the reply in the lower house.
     
    In a written reply, Pon Radhakrishnan, minister of state for finance, said, "The registrar of companies (ROC) office at Mumbai has received 744 complaints against Sahara Q Shop. As per the recommendation from the ROC, the ministry of corporate affairs (MCA) has ordered investigation into the affairs of the company to be conducted by SFIO vide order dated 31 October 2018."
     
    Replying on a question whether investments in other Sahara group companies, like Sahara Q Shop are covered by the Supreme Court's 31 August 2012 order, the minister replied in negative. He said, "The Supreme Court directed SEBI to make refunds to only those investors who invested in optionally fully convertible debentures (OFCDs) of Sahara India Real Estate Corp Ltd (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL).
     
    As on March 2018, SEBI had received 15,146 application involving 43,405 accounts and refunded Rs98.56 crore, including an interest of Rs45.26 crore to 12,522 applicants involving 35,300 accounts, Mr Radhakrishnan informed the Lok Sabha.
     
    Earlier on 31 October 2018, the market regulator had asked Sahara India Commercial Corp Ltd (SICCL) and its promoters, directors to refund with 15% interest per annum, amount collected from investors for investment in OFCDs of the company.
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    COMMENTS

    Lucky Thakur

    5 months ago

    Dear sir ji kab tak mileage humare paise

    Satish Kamble

    5 months ago

    Dear sir i don't have PACl issued bound ,but i have the recites,what should i do

    terence ds

    5 months ago

    Query
    Hello I am TERENCE
    My sister in law had submitted all the required documents to PACL office at the time of maturity 2 years back..but no money was received on submission
    Now there are physical PACL office in Mangalore
    She has submitted all the documents and haven't received Money yet
    Right now she has no proof to apply for claim
    What shall be the remedy ?
    Pls help us on the same ..

    PRAKASH RANJAN

    5 months ago

    SIR MY NAME IS CHANGE IN PAN CARD , WHAT SHOULD BE DO

    sindhu raj

    6 months ago

    When our money is refund our account. We check in online but its not active

    Parameshwar Chanagond

    6 months ago

    Goole

    Subramanian Arumugam

    6 months ago

    Sirs, In Stage 2, Bank Details, "name of the bank" column is not active and does not come active at all. Resulting to unable to complete the submission of my claim.

    REPLY

    balram

    In Reply to Subramanian Arumugam 6 months ago

    SAME ISSUE WITH ME

    Hadiya Prabhu

    6 months ago

    भुगतान न होने के कारण सहारा प्रबंधन और एरिया मैनेजर समेत 6 जनो के खिलाफ FIR दर्ज कराइ गयी हैं। || Sahara India Latest News||
    https://www.awnini.in/2019/02/sahara-q-shop-plan-sahara-india-latest-news-sebi.html?m=1

    PAWAN SUKHEN

    6 months ago

    If I don't have PAN card than ??

    Kishan Suthar

    6 months ago

    Refund

    Gurpreet Singh

    6 months ago

    tell me about webside i want fill my form regarding refund of this policy

    manya

    6 months ago

    Star World Research Indore based Advisory company done fraud with Many Innocent Investor. I want to focus this same infront of you. Me Manish Kumar Gour is proprietor of this fraud company. lot of complaints are pending against Star World Research in SEBI. still we are not getting any justice.

    Big scam in stock advisory company. please be alert from this fraud company. employee talk with fraud name and not proving legal information. illegal plans are given by employee of star world research. A big action required against this fraud company. The details of Company are as follows
    :STAR WORLD RESEARCH
    MANISH KUMAR GOUR PROP. STAR WORLD RESEARCH
    Registration No.-INA000005499
    [email protected]
    Telephone-07316544487
    Fax No.07316544487
    Address-PLOT NO. 42, FLAT 201, MR-3, INDORE, MADHYA PRADESH, 452001.

    very fraud company. please don't invest in this fraud company

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    The Scam
    24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
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    Stockletters in 3 Flavours
    Outstanding research that beats mutual funds year after year
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    MAS: Complete Online Financial Advisory
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