Staffing services provider TeamLease Services disclosed receiving a show-cause notice from the Employees’ Provident Fund Organisation (EPFO) concerning an alleged fund management dispute involving approximately Rs 185 crore. The notice, dated April 13 and received on April 23, highlighted specific contraventions related to fund administration and management by the Employees’ Provident Fund Trust. Major concerns outlined in the notice included investment losses, losses on bond and debenture sales, alleged misappropriation of reserves, and certain recoverable employee-related amounts requiring supporting documentation.
The total financial implication mentioned in the notice amounted to Rs 184.58 crore, inclusive of interest, a figure that the company has contested. TeamLease Services stated that it is currently assessing the notice and intends to pursue appropriate legal recourse while emphasizing its commitment to ensuring full compliance with relevant laws and regulations. The company acknowledged a five-day delay in disclosing the matter due to administrative reasons and the time taken to evaluate the notice’s materiality.
The company previously sought clarification from the regional provident fund office, which had permitted employers to fund only the shortfall indicated in the balance sheet, a matter that was resolved in March 2022. TeamLease Services affirmed its collaboration with authorities to address the issue. Subsequent to this development, TeamLease Services’ shares experienced a decline of up to 3.2% during intraday trading, reaching approximately Rs 1,210 per share on NSE. The stock later traded at Rs 1,233.30, reflecting a 1.34% decrease from the prior close.
The stock has witnessed a decline of around 30% over the past six months, 20% year-to-date, and approximately 35% over the last year, with a more substantial drop of nearly 60% over the past five years.
