Mayo, Welhams, American Embassy schools caught in IL&FS Bond embrace
In the continuing IL&FS noxious bonds saga, the creme de la creme of some of Indias top educational institutions have now come under the bus. Some of the toniest names have their staff provident funds enveloped by the disturbing scandal.
 
A hapless government and new Uday Kotak-led management looks on, but does nothing as the case is being heard in NCLAT. While NCLAT wants to speed up the hearing on the intervening petitions filed by the parties impacted, the new management/government cannot let those who have impleaded get priority in the creditor queue.
 
IANS, which has been at the forefront of reporting this scandal of epic proportions which keeps burgeoning due to the emergence of new details constantly, top of the line academic institutions are now directly in the line of fire. Their staff PF is afflicted by the virus.
 
The list compiled after painstaking research reveals Welhams Girls' School Dehradun, American Embassy School New Delhi, Kodaikanal International School, the prestigious Mayo College Ajmer which incidentally has two entries, Ashoka Hall in Kolkata and then the fabled DAV College Trust with six entries, DAV College with three entries, Manipal Academy of Higher Education with 12 entries while Manipal Institute of Technology has an additional 5 entries. 
 
Notable alumni from Manipal include Satya Nadella, Rajeev Suri, Rajeev Chandrasekhar, Vikas Khanna and many others. DAV Chandigarh is the alma mater of Capt. Vikram Batra, Ayushmann Khurana and Rajiv Pratap Rudy. Mayo alumni include Maharaja Hari Singh of Kashmir, Jaswant Singh, K. Natwar Singh, Amitabh Kant while those from Welhams include Brinda Karat, Deepa Mehta, Radhika Roy.
 
A case of some being more trusting of the veracity of the IL&FS triple A rated bonds more than others. Teachers who impart education at these institutions are part of a larger community of working class people who are suffering as their savings are now affected. Moreover, another excellent Kolkata institution - Orient Day School in Behala with 107 faculty members has also invested staff PF in these bonds. Ditto for a solitary government-owned Kendriya Vidyalaya which too is stuck with this Chinese pup. 
 
It is the teaching staff at these blue riband institutions whose provident fund money is tied up in the bonds. Let us understand that the teachers at some of the best boarding schools must be better paid than other peers in day schools. Mayo College for instance charges Rs 650,000 p.a. for a resident and Rs 13,00,000 p.a. from NRI. Over and above this, a development fee of Rs 26,600 is charged p.a., a computer class fee of Rs 7,700 p.a. Further caution money of Rs 325,000 is charged from a resident and Rs 650,000 from a NRI. Next admission fee of Rs 82,500, one time IT fee Rs 24,900, impress money of Rs 40,000, uniform advance of Rs 25,000 et al.
 
At American Embassy School New Delhi, the fee structure is in dollars. Annual tuition fee Kdg to grade 5 $12,860, grade 6-8 $13,830, grades 9-12 $14,500. The school also charges a registration fee of $5,750 per student payable on first enrolment, an application fee of $200 and a round trip bus fee of $820. The dollar is potentially around Rs 70 currently. 
 
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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COMMENTS

Rahul Choudhury

3 days ago

This article quotes Amitabh Kant as being from Mayo College, if it is referring to the incumbent CEO at NITI Aayog, he is from Modern School Delhi and this is incorrect.
(source: www.amitabhkant.in)

NPS, CBT-EPFO have huge exposure to toxic IL&FS bonds
India's National Pension System and Central Board of Trustees of retirement fund body EPFO stand imperiled due to the toxic nature of the IL&FS bonds it has exposure to. Innumerable NPS funds have exposure to these bonds, IANS has totalled them up to over Rs 1,200 crore.
 
While the government continues to hardsell NPS as a perfect solution for retirement planning providing old age income with reasonable market-based returns, based as it is on a unique Permanent Retirement Account Number (PRAN) allotted to every subscriber for NPS, it is contaminated by the bonds. 
 
What makes it worse for the BJP government trying to get itself re-elected is that Central Board of Trustees EPF too has exposure to the same virus-infected bonds. Both NPS and CBT have skin in the game which is not good news for the government. The amounts vary here as well but CBT EPF 11 B DM has an outstanding exposure of Rs 147 crore while CBT EPF 25 B DM has an exposure of Rs 200 crore. 
 
Another CBT EPF 5 C DM had an exposure of Rs 181.81 crore. The Central Board of Trustees (CBT) of retirement fund body EPFO has in the past turned down the proposal to reduce the mandatory contributions from workers and employers to 10 per cent. Employees and employers contribute 12 per cent of basic wages each towards Employees Provident Fund Scheme (EPF), Employee Pension Scheme (EPS) and Employee Deposit Linked Insurance Scheme (EDLI). 
 
The contributions invested in NPS are managed by eight Pension Fund Managers (PFM) appointed by PFRDA. The Subscriber can choose any one of the given entities: HDFC Pension Management Company Limited, Reliance Capital Pension Fund Limited, UTI Retirement Solutions Limited, Kotak Mahindra Pension Fund Limited, LIC Pension Fund Ltd, SBI Pension Funds Private Limited and ICICI Prudential Pension Funds Management Company Limited. 
 
Subscribers have the option to select allocation pattern for their investment across various asset classes. The subscriber has the freedom to design the portfolio among 3 asset classes: Equity (E): This is a 'High risk – High Return' option as the funds are invested in equity a subscriber can choose to invest up to 50% in this class; Corporate Bonds (C): Funds are invested in fixed income bearing instruments which offer medium returns and government securities;(G): Funds are invested only in government securities. It is important to give this background for IL&FS bonds were 'triple A' rated and considered best of breed till the meltdown began.
 
Pension Fund Regulatory and Development Authority (PFRDA) that regulates the National Pension Scheme (NPS) expects assets under management (AUM) to touch Rs 2.85 lakh crore in FY19, from Rs 2.3 lakh crore in the last financial year. This is a significant number. IANS which has been at the vanguard of exposing the problems with IL&FS bonds has now discovered that NPS too has large investments in these toxic bonds: 
 
* NPS Trust - A/c UTI Retirement Pension Fund scheme - Central govt: Rs 10 cr
* NPS Trust - ditto - state govt: Rs 4 cr
* NPS Trust - ditto - central govt: Rs 10 cr 
* NPS Trust - ditto - C Tier 1: Rs 0.10 cr
* NPS Trust - ditto - state govt: Rs 9.80 cr
* NPS Trust - ditto - NPS Lite scheme Govt pattern: 0.10 cr 
 
Over 75 such entries were found with amounts varying from a high of Rs 110 crore in one case to Rs 75 crore in two cases and others ranging between Rs 10 lakh to Rs 10 to Rs 15 crore to several entries of Rs 20 crore to Rs 19.50 crore to Rs 14.36 crore to many of Rs 15 crore each. Also there are entries of Rs 40 crore, Rs 50 crore, Rs 28 crore, Rs 35 crore. As a norm they are for central and state govt employees who had joined the NPS. Ballpark, it is in excess of Rs 1,200-crore exposure.
 
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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Sudhakar Ojha

2 days ago

In a country like India where corporate governance is weak and trustees act like owners the idea of government sponsored pension fund scheme itself is now open to question.

Hudaf Shaikh

3 days ago

Reality is that there is no return without risk - that said, the EPF and PPF trustees ensured that the debt instruments they invested are low risk as they were AAA rated. Sadly, it seems that not just the auditors but also the rating agencies collaborated with IL&FS directors and promoters in masking high risk debt as AAA to defraud the investors which include a number of PF and pension trusts.

The Government should not just recover the huge bonuses and other benefits given by IL&FS to it's directors but also the promoters who rewarded themselves with huge dividends from fictitious profits.

Marquee MNC names trapped in IL&FS bond squeeze
Amazingly, the allure of the triple A rated IL&FS bonds was so toxic that while both Indian private and public sector got sucked into the honeycomb, a vast swathe of top rated multi national corporations also decided to invest their employees.
 
Ministry of Corporate Affairs supplementary affidavit filed with NCLAT on April 8 has revealed a treasure trove of fresh information. 
 
While IANS has been at the vanguard of exposing the extent of malfeasance at IL&FS, as also naming the companies and entities which have exposure to the virus infected bonds, the real size, scope and magnitude has now been revealed -- provident and pension funds of 1,400 firms, lakhs of employees and Rs 9,700 crore at stake and no real attempt either to cauterise the festering wound or begin a repayment process barring the recent April 8 order, which says that some element of prioritisation needs to be factored in for the hapless working class caught out of their comfort zones.
 
However, the government does not want preferential treatment for Provident and Pension Funds for it will upset the other equally huge clutch of creditors. So, in the catch 22 that prevails, everybody loses.
 
Over 150 intervening petitions have been filed with NCLAT seeking resolution of this matter for it is the working class -- blue and white collar -- which is directly impacted by this malaise. 
 
Investment banks, tech companies, pharma giants, airline heavy hitters, the list is long and the amounts large. 
 
On scouring through the long lists which run over pages and pages, IANS has now discovered that Bata India employees statutory PF, Glaxo India, Otis Elevator, Sumitomo Indian Staff PF, McCann Erickson India EPF, Lufthansa German Airlines employees local PF, Philips Electronics India, BASF, Novartis, Pernod Ricard, Bechtel India, JP Morgan, Nestle, shockingly Canadian High Commission India Staff, British Airways pls staff, Texas Instruments India, Volvo India, Cisco Systems India, Sanofi India, Sapient Consulting, BBC Worldwide India, McKinsey Knowledge Centre and Shell India.
 
Many of these companies have multiple exposure, for instance, Otis has several entries with different amounts varying from Rs 55 lakh to Rs 1 to 2 crore over different years, 2012 and then again in September 2015. 
 
What is perhaps even more pertinent is that slapbang in the middle of an ongoing election, the emergence of such sloth on the part of an entity like IL&FS where the government is unable to ring fence the savings of common working class folk is something that requires urgent attention.
 
Imagine the staff of American Embassy School PF, Barclays Bank Plc India, American Express India, Societe Generale EPF, British Airways has many entries ranging from Staff Pension Fund to Cabin Crew Pension Fund, ditto for Philips, Alcatel Lucent, Mercedes Benz R&D India, Procter & Gamble Executive Pension Plan, Adobe Systems, HP Globalsoft, Schlumberger, CapGemini, Cadbury India, Goodricke Group, Gillette, et al. 
 
As one turns page after page, many of these entities have multiple entries with enhanced exposure. Caught in a maelstrom which is growing exponentially, what should be worrying for these MNCs and their employees is that they fall in the category of unsecured creditors and their money is not at all safe due to the level of toxicity. This list compiled by MCA is as recent as December 31, 2018. 
 
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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COMMENTS

tanay

5 days ago

I work in one of the mentioned MNC's, can you please guide on How to check how much of our PF portfolio is impacted because of these toxic bonds?

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