Two IL&FS employees released in Ethiopia after company offers to clear dues of local staff

NEW DELHI: After six days in captivity, two employees of IL&FS Group's joint venture in Ethiopia — Harish Bandi and Bhaskar Reddy — were released on Saturday following a commitment given by the Indian company to clear unpaid salaries of local staff over the next few days.

Indian authorities and local IL&FS Transportation Network Ltd (ITNL) are in contact with the Ethiopian authorities for the immediate release of Neeraj Raghuwanshi, who is the only Indian hostage in the Nekemte Bure Lot 1 camp, sources told TOI. Bandi and Reddy, who were in the Ambo Wolosio road project, were released as the latter complained of uneasiness.

"Harish is now doing fine and he is with us in Addis Ababa. We are in talks with the authorities for the release of the others," said C Chandra Sekhar, who is coordinating the affairs of ITNL and its subsidiary, Elsamex SA, a Spanish company that the beleaguered group acquired around a decade ago. Efforts are also under way for the release of the other four who are in captivity in the Nekemte Bure Lot 3 camp and the company is looking to clear unpaid salary bills for October and November by the middle of next week.

Estimates suggest the joint venture that has been executing projects across three sites in Ethiopia owed at least $6 million (around Rs 42 crore) in unpaid salaries and wages to Ethiopian employees (around $250,000) and Indian expats ($280,000). Sources said local laws also required IL&FS Group to give severance pay equivalent to eight months' salary.

A little less than $1 million of statutory payments are also due, while a little over $1 million of hiring and rental charges are outstanding, sources said. A further $1.25 million of fuel-related payments have to be made and around $1.5 million has to be paid to sub-contractors.

An IL&FS spokesperson did not comment on the issue. In a statement, the company said: "ITNL had sought approval on November 16, 2018, through its authorised dealer bank, to remit funds overseas. Approvals are awaited. Meanwhile, as a result of collective and sustained engagement with various authorities, two of the seven employees have been allowed to move out of the camp and are now in Addis Ababa."

Sources told TOI that that the problem started 2-3 months ago after a series of defaults, which led to the board being superseded, triggered several restrictions on IL&FS Group's operations, including its ability to remit funds overseas. While company executives were promising to transfer funds almost every day, pressure was building in the African country as the tax authorities initiated action due to payment defaults. In fact, the company is facing several cases in Ethiopia and the contracts have also been cancelled.

Initially, company representatives tried to reason with the authorities that the group has assets of close to Rs 1,000 crore in Ethiopia but they did not respond positively fearing a backlash from the local employees, who were worried about unpaid salaries and feared that IL&FS executives may exit the country without clearing their dues. This led to the house arrest of seven employees in the three camps that they shared with the local staff.