Yes, we decided to review our decision. We realised that we should not penalise the company for the wrongdoings of some people. It's like blacklisting a bank because of a fraud in one of its branches, a member of the EPFOs Finance and Investment Commission (FIC) said. Also since EPFO invests just a tiny fraction of its Rs 3 lakh crore corpus in the firm, it decided it should risk it for the benefit of high returns.
The decision was taken unanimously by all members of the FIC in a meeting on Friday. The advisory body had in a previous meeting in December decided against investing in the housing finance company, after some of its top officials were put under investigation on suspicion of having taken bribes to disburse loans.
In the interest to the subscribers, we decided to lift the ban on LICHF. Our decision will be communicated to the Central Board of Trustees, which will take a final call on the issue when it meets on February 15, the member said.
EPFO had earmarked Rs 846 crore for buying LICHFs bonds. At present, its total exposure to the company is about Rs 454 crore and it has a window of investing another Rs 392 crore in the companys bonds.The EPFOs apex decision making body the Central Board of Trustees, which is headed by Kharge also said that further investments into the company should be made only after the investigation was completed.
However, the housing finance company is back on the FICs list as a viable investment opportunity after the finance ministry urged it to reconsider the matter on the grounds that the company had government backing and all its assets were secure. It also argued that LICHF should be judged on its strong fundamentals and not on the basis of individual misconduct.
Further, the company has also been given a top rating of AAA from credit rating agencies even after the scam.