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P.Manoj

NEW DELHI, June 7

THE Board of Trustees of Seamen's Provident Fund Organisation (SPFO) has forwarded three proposals to the Union Government for compensating the fund to the tune of Rs 93 crore, which was lost in the recent gilts scam.

At a special meeting held in Mumbai on Thursday, the board of trustees recommended that the Union Government should either provide an outright grant of Rs 93 crore or an interest-free loan of Rs 234 crore to compensate the loss caused to the fund in the gilts scam, SPFO sources said.

The third option suggested by the board was to issue a bond in the name of SPFO with the Reserve Bank of India, which would only pay interest on the bonds, the sources said.

"All these three compensation packages should involve contributions from the industry, unions and the Government '', the sources said.

The Board felt that since the SPFO was a non-government trust, the compensation package should not be the sole responsibility of the Government.

"When UTI and Allahabad Bank can be propped up, the seamen will also expect their provident fund to be taken care of '', the sources said.

The Board was of the view that the Rs 93-crore loss sustained by the fund was almost impossible to recover since this amount was utilised by the brokers to speculate in the stock market.

The SPFO had given about Rs 93 crore to brokers for investing in government securities and bonds, but failed to receive physical possession of the securities and bonds in which the money was supposed to have been invested.

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