Money & Banking

Ethiopian bank create hurdles for release of IL&FS Indian staff

Nandana James | Updated on January 16, 2019 Published on January 16, 2019

Staffers stay captive; expect MEA to pressurise Ethiopian government, bank

The four Indian IL&FS employees held hostage in Ethiopia since November 24, 2018 continue to be in captivity as the Commercial Bank of Ethiopia (CBE) is yet to release payments to the local staff despite Exim Bank’s move to unblock the funds.

Exim Bank had written to the CBE on January 11 authoriszing it to urgently release funds amounting to Ethiopian Birr (ETB) 5.39 million from the project account, to enable ITNL Elsamex JV Bure (the joint venture between IL&FS Transportation Networks Ltd and Elsamex SA) to secure the release of the Indian employees. However, CBE has not yet released the payments. Though it is not clear why the Ethiopian bank has not yet made the payments, sources indicated that it could be related to some pending bank guarantees.

CBE did not respond to queries sent by BusinessLine via email. IL&FS declined to comment. Exim Bank said that it has not received any response from CBE.

The payment of this sum, which amounts to the Ethiopian employees’ four months’ salary (ETB 4.89 million), was demanded by the local employees as a ransom to secure the long-overdue release of the Indian employees. IL&FS had also requested for the unblocking of an additional ETB 500,000 for the Indian employees, who haven’t been paid their salaries since July 2018. The three employees who were released before also haven’t been paid their salaries.

“Our embassy is in touch with all concerned to ensure the safe and expeditious release of the Indian employees,” a source at the Ministry of External Affairs (MEA) said, but declined to comment further.

“We expect pressure from the MEA that would pressurise the Ethiopian government or direct money to come from India to solve this issue. We want the MEA to save us and take us back home,” one of the stranded employees said adding that IL&FS hasn’t transferred neither their salaries pending from July or any money for their daily expenses.

Safety concerns

Their hostage situation has been riddled with safety concerns, with the locals even curbing food and water supplies occasionally. Following the house arrest, they had attempted to escape from the camp with the help of the Ethiopian police, only to be thwarted by hordes of livid Ethiopian employees.

Even after IL&FS finally relented and paid the Ethiopian employees their dues, the Indian employees still find themselves caught in the crossfire of demands for ransom and negotiations to secure their long-overdue release. The latest roadblock is in the form of CBE not releasing the money.

The hostage crisis can be traced back to when the JV company failed to pay the local employees salaries for two months and statutory dues (income tax, pensions and withholding tax) for eight months, which led to the Indian employees being held hostage in return for the payment.

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Published on January 16, 2019
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