Air India unions seek forensic audit of provident fund trusts, alleges 'huge losses'

The forum sought Hardeep Puri's intervention in the matter related to the two trusts

Air India Joint Action Forum of Unions on Tuesday sought an independent forensic audit into the operations of the airline's provident fund trusts, alleging "huge losses" due to "questionable investments".

In an e-mail to Civil Aviation Minister Hardeep Singh Puri, the forum sought his intervention in the matter related to the two trusts -- one each of the erstwhile Indian Airlines and Air India.

"We have been compelled to write to you to seek your guiding light and help, in regard to the crisis that has engulfed our Provident Fund trusts, both AIEPF & IAEPF trusts, which together are one of the largest in the Country.

"It has come as a shock to all of us unions, many of whom were not involved or aware of the day to day functioning of the Provident Fund trusts of Indian Airlines and Air India that huge losses have been incurred by both trusts, due to questionable investments in companies like ILFS and Dewan Housing, among others, which collapsed," the unions said in the e-mail, accessed by PTI.

The Forum claims representation of over 10,000 Air India staff members comprising pilots, engineers, cabin crew and ground staff.

"We have also learnt that even though the subsidiary companies had become separate legal entities almost 14 years ago, incorporated in 2007/08, they continued in the main AIEPF/IAEPF trust, with payouts on retirements from these trusts, without the PF trusts receiving the corresponding timely contributions from these companies in some cases for years," the Forum stated.

Alleging that there are also some "advisory third party consultants" on whose advice and reportedly through whom most of these investments have been done, the Forum said "there seems to be more than meets the eye and we feel a independent forensic audit of both the trusts operations of the last decade is necessary and overdue (as well)."

Thousands of Air India employees have their entire life savings in these two provident fund trusts and such huge losses would erode their capitalised value leading to collapse, it said.

"We have only learnt of the magnitude of these losses allegedly incurred through some questionable investments, by means of a MOCA letter...which is in public domain, wherein the figure of losses mentioned is Rs 1085 crore," the unions stated.

The employees are not to blame for this shortfall and the costs as a consequence of transfer of the provident fund trusts to the EPFO due to the proposed privatisation, which will add to PF trust losses / capital erosion due to the EPFO demand to liquidate our assets, apart from transition expenses and entry load, the forum said.

"It is in the light of this that we seek your intervention and support so that the Government assist us to cover these losses and may subsidize the transition of the Air India / Indian Airlines PF trusts to the EPFO as exempted trusts under the 1952 Act, without any loss to any employee," the Joint Forum said.