Monday, January 30, 2012

ONGC - PRBS - Adverse affects of MOU/Cir. PRBS-40 of 18.06.98 By Capt. Narayan Singh Rathore

adverse affects of MOU/cir. PRBS-40 of 18.06.98

by Narayan Singh Rathore on Friday, September 16, 2011 at 3:08am

Bby H.C. issued Ad-interim Order dt 5.11.1996 with direction that ONGC n ASTO negotiate to raise "additional funds" to save the Scheme (WP 1718/1996). MOU signed on 3.2.1998. It is stated in MOU that it was in copliance of Order dt. 5.11.1996 of Bby H.C. Pl note that negotiation was restricted to "Raise Additional Funds" only to make the Scheme Viable. ONGC MIS-UTILISED this opportunity to push the Scheme towards assured n ascertained "Un-viability" under MOU which was signed in "Good Faith" n under unspecified "Mutual Understanding". A unique design to ascertain financial viability on the basis of Good faith. I am sure nobody in would cite a single case where decision are taken in good faith when financial matters are involved. Obvious enough, there were no negotiations. Reasons: -

(a). Introduction of Notional Salary for purpose of (i) deduction of fixed % contr from monthly salary of members n (ii) grant of Pension benefit. Lets analyse these two factors. we take case of Mr. KD Pillai. His actual salary was Rs.21913 whereas Notional salary was Rs.8806. You can imagine difference in 5% fixed contr. (1095.65 - 440.30 = 655.45). This reduced existing source of income of Trust. Then we take my case. Actual salary Rs.32649 n Notional salary Rs.14445/-. Difference in 5% fxd contr.Rs.909.70/month (1632.45 - 722.75). Another case of an executive in service on 1.4.2007. His actual/ notional salary Rs.47380/14414. 10% fxd contr. Rs.4738 on actual n Rs.1441.40 on notional. lets see what wd have been 5% on actual salary. Rs.2369/-. See the difference. 5% contr. on Actual is greater than 10% on notional. Do we not hang in shame that ASTO (CWC) is said to have negotiated for17-18 months to achieve this ? Can such feat make the Scheme viable ? Certainly Not. Notional Salary exposed the Scheme to never ending Unviability.PRBS Trust submits Affidavits on behalf of CMD that unviable scheme was made viable under such dubious MOU of 3.2.1998.Then take Pension benefit. In case of KD Pillai, his entitlement as per Scheme-1991 on 30.4.98 was Rs.738x/ (as he retired prior to Cir. PRBS-40 of 18.6.1998) but he got Rs.2467.50 only under Defined Corpus. Kerala H.C. granted him relief but ONGC challenged Court verdict under SLP/2009 in Supreme Court. Hon'ble Apex Court upheld verdict n ONGC duly lost the case. It was unworthy of a Global Giant n Maharatna Co. to adopt such unhealthy course. In case of capt. Narayan Singh Rathore, Pension benefit worked out Rs.9080.66 on actual salary under Scheme-1991 n Rs.5093.64 under revised scheme of 18.6.1998 but LIC fixed Pension at Rs.39xx/month under un-notified Defined Corpus (can call it Balyan Device). Now we take third case of an executive who retires in 2011. Ratio of actual salary to notional is 100 : 33. This is going to ensure his pension at 33% of his entitlement on actual salary.

Another vital damage done by Notional salary was non-implemetation of Cir. PRBS-38 of 17.1.1996 which required deduction of fxd contr. on revised salary w.e.f. 1.1.1992 n all future Pay revisions. Was it an healthy approach to deprive enhanced fxd % contr, to Fund of Trust ? NO. It was colossal recurring loss. This was again to ensure Un-viability of PRBS.

When viability of PRBS was challenged in August 1996, ONGC kept the raise in Additional Contr. as "Notional" upto 1.4.1997. This was done inspite of clear expression by Actuary in Report dt. 2.8.1996 that there was 78% rise in prices of commodities (surrendered facilities). This information shd have been used to "Review" the funds in accordance with Para 7 of Scheme-1991. Can we pray the Managing Trustee/ CMD ONGC to very kindly justify ignoring such vital recommendation of Actuary ? During whole process of so called purported Negotiations of 17-18 months ? Most difficult.

Friends, solution lies in revocation of Cir. PRBS-40 which amended the Scheme in utter violation of Para 32 n Para 31.2 of Rules-1991, without appropriate approval of Comp. Authy who had approved the Scheme/Rules-1991. Thanks.

May the God bless all with Ordinary Prude


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