Hyderabad Firm and Directors Face Criminal Charges for Alleged PF Fund Diversion
The Cyberabad Economic Offences Wing (EOW) has initiated a significant criminal case against a Hyderabad-based private company and its top executives for allegedly diverting several crores of rupees that were deducted from employees' salaries as provident fund (PF) contributions. This action follows a formal complaint filed by enforcement authorities, highlighting serious violations of statutory financial obligations.
Legal Action Under Bharatiya Nyaya Sanhita
Based on a detailed complaint submitted by Alugubelly Anusha Reddy, an enforcement officer at the Employees' Provident Fund Organisation (EPFO) Sangareddy regional office, the EOW police have officially registered a case against the company Energetic People and its directors, Sharath Bhushan Samaleti and Satish Reddy Chintapalli. The charges have been filed under specific sections of the Bharatiya Nyaya Sanhita (BNS), including Section 318(4), which pertains to cheating and dishonestly inducing delivery of property, and Section 316(5), which addresses criminal breach of trust by agents or merchants. This legal step was formally taken on February 16, marking a critical development in the investigation.
Allegations of Systematic PF Deduction Failures
The core allegation from the complainant centers on the company's failure to deposit statutory PF deductions for thousands of its workers. Operating from Kavuri Hills in Hyderabad, the establishment is accused of violating the EPF Scheme of 1952, which mandates the monthly remittance of the employee share deducted from salaries. This regulatory framework is designed to protect workers' retirement savings, and any breach represents a significant financial misconduct.
The case gained momentum after a former employee, Rohit Kumar Sharma, lodged a complaint with the EPFO in January. Sharma alleged that PF contributions were consistently deducted from his salary but never remitted to the EPFO. In response, EPFO officials conducted a thorough scrutiny of the company's salary records, uncovering that between June and December 2025, the firm deducted Rs 11,903 from Sharma's salary without crediting it to the EPF account.
Extent of the Financial Misappropriation
Further investigation revealed a much broader pattern of non-compliance. An examination of the August 2025 payment register showed that deductions were made for 24,997 employees, totaling an impressive Rs 3.4 crore. However, contributions were remitted for only 292 employees, amounting to a mere Rs 4.38 lakh. This discrepancy indicates that the employer deducted approximately Rs 3.3 crore in employees' share of PF contributions for that single month but failed to transfer these funds to the statutory EPF account, directly contravening Paragraph 38(1) of the EPF Scheme, 1952.
EOW Investigation and Potential Wider Implications
According to officials from the Cyberabad EOW, the failure to deposit these deducted contributions constitutes a clear case of misappropriation of entrusted funds. An EOW official stated, "We suspect that the company could be in default for EPF remittances affecting over 20,000 employees, with issues potentially dating back to June 2025. The total financial liability might be substantially larger than currently estimated. Our team is meticulously analyzing all available evidence, and we plan to question the company representatives thoroughly. Based on the findings from this ongoing investigation, appropriate legal actions will be initiated to ensure accountability and justice."
This case underscores the critical importance of corporate compliance with labor laws and the protection of employee benefits. The EPFO plays a vital role in safeguarding workers' financial futures, and any deviation from remittance obligations can have severe consequences for both employees and the accused entities. The Cyberabad EOW's proactive stance in registering this criminal case highlights the enforcement mechanisms in place to address such financial irregularities and deter similar misconduct in the future.
