Monday, September 27, 2010

Key hulchul Trust?

If you have read the Nandan's Book Imagining India: Ideas for the New Century, probably you would be knowing how many law suits Mr.Manish Sabharwal has been facing. Its over 1500!!. In a recent article he brings an interesting news of how the actually looting takes place in public in the most celebrated democracy of India: Here is a bit:

  • Despite his recent bail, Ramalinga Raju of Satyam has learnt the hard way that those who ride tigers end up inside them. But the hole he created—about Rs 10,000 crore—is small relative to the Rs 50,000 crore deficit in the Employee Pension Scheme (EPS) created by the trustees of the Employees Provident Fund Organisation (EPFO). If the trustees are not willing to take responsibility for this hole they must be held liable or made to resign so that we fix the birth defect in the governance structure at EPFO, which allowed the introduction of what is possibly the world’s only pension scheme that has defined both benefits and contributions.

  • More importantly, the decision by the trustees to pay an above-market rate return to members is symbolic of the lack of “fiduciary” perspective at the EPFO Board. First, this money has not been earned but created by a kind of accounting that is of not much higher quality than Satyam. Second, if this mythical Rs 2,000 crore does exist, why not use it to fill in the EPS hole? Third, why reduce benefits under EPS and EPFO that are in good enough health to declare an investment bonus?

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