Companies

Exim Bank releases payment in bid to end IL&FS Ethiopia hostage crisis

Nandana James Mumbai | Updated on January 11, 2019 Published on January 11, 2019

This is just a representational image.   -  REUTERS

In a move that could help bring the ongoing hostage crisis in Ethiopia to an end, the Exim Bank on Friday informed the Commercial Bank of Ethiopia about the release of payments to secure the release of four Indian employees of IL&FS. Exim Bank said it has released the funds from the project account as a special case, on humanitarian considerations.

“Exim Bank took this step on IEJV’s (IL&FS’ joint venture in Ethiopia) assurance and concrete plan that this will enable the release of the four Indians who are held captive at the project site.

“Considering the serious hostage situation, Exim Bank allowed the withdrawal of Ethiopian Birr (ETB) 4.89 million towards the payment of four months’ net salary of local workers and ETB 0.50 million towards the day-to-day expenses, fuel, transport and legal and advocate fees,” an Exim Bank spokesperson told BusinessLine.

IL&FS had sent a letter on January 8 seeking Exim Bank’s help.

Swinging into action

“Exim Bank swung into action on the receipt of the request from IEJV. Bank officials were in continuous contact with the company throughout Wednesday and Thursday, to clear the path for the release of funds,” the bank said in a statement.

Exim Bank asked IL&FS to submit a concrete plan for the payment of all its liabilities, along with an undertaking to utilise funds drawn from the account only for the purpose specified. The company furnished the information by Thursday evening.

“Given the gravity of the situation, the competent authorities at Exim Bank met in a late-night sitting yesterday and approved the request of the company,” the spokesperson said. “IEJV was also instructed to clear all project-related dues, including the bank guarantee commission of $0.43 million due to Exim Bank, at the earliest.”

IL&FS declined to comment.

Exim Bank said that through various communications with the IL&FS unit, the bank had conveyed its willingness to consider permitting funds from the project accounts to be used.

The Indian employees have been held hostage since November 24, 2018. They work for ITNL-Elsamex JV Bure, a joint venture between IL&FS Transportation Networks Ltd and Elsamex SA.

The trouble started when the JV failed to pay the local employees salaries for two months and statutory dues for eight months.

Published on January 11, 2019
This article is closed for comments.
Please Email the Editor