‘More firms using EPFO officials to deny employee dues’

ACB officials claim that this is just the tip of the iceberg and the investigation is likely to ferret out the involvement of major companies. The modus operandi used by these companies was to manipulate the muster rolls of the employees to show a reduced number of staff. 

“Many companies would only show 30 per cent of their actual employee strength and pay the provident fund for that many employees. It is mandatory for employers to contribute the same amount collected from the employee for the provident fund,” a senior CBI official told DTNext. These companies pay a percentage, of what they save by evading the employer’s contribution, to corrupt EPFO officials. “We are yet to ascertain how much money had been paid to these corrupt EPFO officials. We have unearthed documents that suggest many more companies were using the services of the officials namely Ramanan, M Thangavel, R Vimala and D Vijayakumar, for defrauding the EPFO,” the official added. 

CBI sources suggested that many more officials of the EPFO were involved in the racket and further investigations are on to identify and book them. “We have information that many major companies in Tamil Nadu, that employ more than 1,000 employees were involved in the scam. The money involved is huge and these officials have been acquiring assets beyond their known sources of income,” the official added.

For example, if a company managed to save the employer’s contribution by evading the payment for 1,000 employees, they could easily save several lakhs per month. For an employee who gets Rs 15,000 basic salary per month, the PF contribution could be 12 per cent, that is Rs 1,800. The same amount has to be contributed by the employer. When a company evades employer’s contribution for 1,000 employees, they will save Rs 18 lakh per month, the official added.