Lesco (Lahore Electric Supply Company) has defaulted upon its Rs 3 billion final repayment due on April 22 to Employees Old Age Benefits Institution, a labour welfare pension organisation. It has been learnt from capital market sources that EOBI had acquired Rs 3 billion Sukuk Bonds of one year tenor in 2008.
However after the period of one year, Lesco has failed to meet its Principal repayment obligations due on April 22 in spite of Government guarantees. It is further learnt that EOBI has directed the trustees to issue a default notice to LESCO immediately but the default continues.
Various labour welfare organisations and concerned labour leaders have strongly objected to the continuous bleeding of EOBI trust monies to bail out ailing government entities. The labour circles are contemplating legal action against EOBI for diverting EOBI trust monies solely contributed by poor labourers to bail out financially bankrupt organisations. They have informed Business Recorder that they have already moved Public Accounts Committee on this haemorrhaging of EOBI fund to the tune of Rs 15 Billion to inject blood into ailing organisation s like Pepco (Pakistan Electric Power Company), Lesco, Mesco and KESC.It may be recalled that PAC has already taken serious note of misuse of Labour welfare funds for the purposes other than labour welfare.
Economists and business circles are of the view that recovery of billions of funds injected into sick public sector organisation is highly risky and uncertain due to Government''s fiscal problems and IMF conditionalities which bar government printing of notes. Therefore, repeated recourse to pension funds as well as funds of other liquid organisations and government owned companies is being taken which are essentially trust funds and hence should not be used as a substitute for bank borrowing.