Financial Daily from THE HINDU group of publications
Wednesday, Apr 24, 2002
SIV workers rush to close LIC policies
COIMBATORE, April 23
THE management of the erstwhile viscose fibre manufacturing major, SIV Industries, has informed its workers to remit their insurance premia dues directly to the corporation, expressing its inability to pay this due.
Following this, there has been a spate of surrender of insurance policies by the workforce of the trouble-torn unit during the last fortnight.
The SIV management has said that in the prevailing scenario of serious financial crunch, the company has not been able to disburse the salaries on the notified date for the past few months and it was constrained to call upon the workers to directly remit the premium payable with effect from January 2002.
According to union sources, the number of policies totalled 6,000, including both officers and workers, and the remittance on account of premia amounted to Rs 9 lakh.
Consequent to the circular, close to 300 policies were said to have been surrendered so far, averaging about 30 policies everyday.
LIC officials confirmed this rush for surrender of policies. They pointed out that the sum assured on the policies surrendered amounted to nearly Rs 60 lakh.
"The policy holders stood to lose about 65 per cent of the sum assured," the official added.
The workers admit that under the circumstances, they were forced to surrender their insurance policies, as they did not have any disposable income to pay the premium from.
"The surrender would help in taking care of settling house rent dues, school fees and other incidental expenses, at least temporarily,'' a union source pointed out.
Demanding immediate release of their wages, outstanding since January this year, the workers had chalked out a protest plan last month.
This has been temporarily suspended as the union representatives have been called for a meeting with the Commissioner of Labour at Chennai on April 24.
Sources hoped that a solution to the deadlock over the wage arrears would emerge at the meeting.
The tripartite meetings held so far, involving the Labour Department, the company and the union representatives, have not offered any respite for the workers.
This unit at Sirumugai near Mettupalayam has sought the permission from the State Government to lay-off its 2,225 workers, as it has been unable to find any source for raising about Rs 46 crore to re-start plant operations.
The plant operations had come to a grinding halt from October 19, 2001, as the unit was unable to mop up about Rs 6 crore to pay the electricity charges.
TNEB effected the disconnection in mid-January this year, after waiting for about 2 months for the unit to remit its dues.
Meanwhile, the company has suffered an erosion in its networth and has been forced to make a reference to the Board for Industrial and Financial Reconstruction.
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