IL&FS’s Indian Employees Held Hostage in Ethiopia over Non-payment of Salaries to Locals

A tragic turn of events has put seven employees of IL&FS in Ethiopia in danger due to non-payment by the company. In a tweet put out by Neeraj Raghuwanshi, it has come to light that employees, including himself, are being kept hostage by the local labour and staff for the past four days as they are unhappy over non-payment of creditors and their salaries.

#SOS We 7 employee from #ILFS are hostages by local labor/staff at in Ethiopia from last 4 days coz of nonpayment of creditors and local salaries. #ILFS denied to send fund from India. Kindly save us. Day2day situation worsening @narendramodi @sushmaswaraj @udaykotak @arunjaitley — neeraj raghuwanshi (@chota86) November 27, 2018

As we know in the continuing saga of the IL&FS mess, in order to cauterise the relentless hemorrhaging, majority of their foreign subsidiaries are being shut down.

Almost all international offices will essentially be shut down immediately as part of the new action plan which the Uday Kotak-helmed board will give to the court. It is to be expected that majority of the subsidiaries will be wound up while the rest are scaled down considerably.

In 2016, IL&FS had won a Rs1,525 crore road contract in Ethiopia by submitting its winning bid to the Ethiopian Roads Authority. At that time, the Authority had awarded IL&FS a long-term contract for completing multiple road projects in Ethiopia for a period of eight years. We now know that IL&FS has run out of money to keep the project going and has been undergoing the process of shutting down its business in the country. Mr Raghuwanshi’s heartbreaking tweet now informs us that the company’s woes have quite literally become a dangerous situation for these seven stranded employees. Mr Kotak, who now heads the new board, has been alerted about the plight of the employees and has asked the ITNL board to look into the issue. The Ethiopian company is “one of the maze of foreign companies below ITNL”, said a top level source in the new management.

Apparently, this is also not the first time such a case has occurred with IL&FS Transportation. A few years back, there was a similar instance in Nagaland when employees’ lives were threatened by militants in the area. IL&FS Transportation was contracted for a mega project of constructing two-lane roads connecting various locations under the Special Accelerated Road Development Programme in the Northeast. This project was plagued by extortion from several different militant factions who successfully extorted several lakhs of rupees. There were instances when rebel groups took away the keys of all the excavators working in the area and demanded for huge sums of money for return of the keys. The project was delayed by several years and the company tried to lay the blame at the feet of the militant groups.

Not having received a satisfactory response from the company, Mr Raghuwanshi has resorted to putting out this tweet and tagging prime minister Narendra Modi, and his Cabinet colleagues Sushma Swaraj and Arun Jaitley and Mr Kotak, who is heading the debt-ridden group, to perhaps draw some attention to their misfortune.

In a series of tweets, he has also posted a screenshot of an email that pleads for help, stating that the “local administrations (will) put us behind the bars or may local staff will kill us because of the company’s fault.” His message reiterates that the employees are only to blame for being loyal to the company and sticking out with this project to the end.

From his mail, it seems that these stranded employees have met with the Ethiopian Road Authority who have suggested that they should first pay any outstanding salaries of the local labours only after which would they be able to take any action.

To their disappointment, even the Indian Embassy told them that this was “only the fault of you employees (of IL&FS), you did not complain earlier to take action, in emergency you people are complaining.”

The Indian Embassy has apparently written to the management of the company and will take any action after receiving a response.

It is sad to see that these employees are being caught in this mess in such a way that neither the Ethiopian Road Authority nor the Indian Embassy is able to provide any help. This dire turn of events has led Mr Raghuvanshi to send out such a cry for help.

Update: Moneylife has learnt that ITNL (Infrastructure Transportation Network Ltd), the publicly listed IL&FS subsidiary, is already aware of the problem and is in discussions with the Ethiopian side. We have further learnt that the Ethiopian project has been given some guarantees by Indian institutions and the board, and the Ethiopian Road Authority is in talks to invoke those guarantees and release Indian employees.