Air India to shift PF accounts to EPFO before ownership transfer

The carrier is undergoing disinvestment

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Air India will shift its employees’ provident fund accounts to the Employees’ Provident Fund Office (EPFO) before the ownership of the Airline is transferred. The Air India Specific Alternative Mechanism (AISAM) assures that the best possible realisable value investments will be obtained. Currently the provident fund (PF) is being operated via two trusts.

The Indian government is preparing to cover up the shortfall owing to the liquidation value of current investments in the PF trusts of Air India, which is undergoing disinvestment. The strategic sale of the carrier had received approval from the Cabinet Committee on Economic Affairs in February 2019.

The Department of Investment and Public Asset Management (DIPAM) anticipates that the financial bidding for the strategic disinvestment of the carrier will take place in September 2021. The Government plans to hand over the Airline by December 2021.

Meanwhile, Cairn Energy and Devas Multimedia, are demanding US$ 1.725 billion and US$ 1.2 billion from India, which they apparently won in international arbitrations. They have filed lawsuits in the US and have sought declaratory and money judgement against Air India, considering it as an alter ego of India as a country. Lawyers have been appointed to defend Air India, and this issue is not expected to hamper divestment procedures in any way. Investor sentiment is expected to remain unaffected by the matter. However, if required, the Government is willing to give a guarantee to the prospective bidders against the same.

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