IL&FS: 7 Indian employees held hostage by unpaid staff in Ethiopia

The Ministry of Foreign Affairs is looking into claims made by seven Indian IL&FS officers who state that they are being held as hostages by the local staff in Ethiopia. The reason for this alleged hostage situation is because Infrastructure Leasing and Financial Services Ltd. began defaulting on $12.6 billion in debt.

There seven Indian workers have alleged that they have been held hostage since November 25 by the unpaid local staff at three sites in Ethiopia’s Oromia and Amhara states. This was conveyed in an emailed letter from the Indian employees.

The letter stated that the termination of some projects and joint ventures may have triggered the local employees panic. The Indian employees stated that the local police authorities and officials were siding with the locals. they were caught in the "middle of corporate disagreements, blame games and bureaucratic issues.

According to a report by Bloomberg , an official at the Indian embassy in the capital Addis Ababa said they were “closely following up with local Ethiopian authorities and IL&FS management to resolve the issue”, and the MEA officials also confirmed that they were looking into the issue. A spokesperson for IL&FS declined to comment.

"Concerns of project termination and absence of senior management from project camps might have triggered panic in local employees and led them to believe confining expat employees might force the organization to pay their salaries," the employees wrote in a letter addressed to the Indian and Spanish ambassadors, as well as a number of Ethiopian ministries and the local World Bank representative.

The management according to the letter stated that their inability to send funds was because of restrictions imposed by the Reserve Bank of India. The IL&FS has defaulted on paying the taxes and pensions of the local employees for the past nine months.

"We tried to reason with local employees and tried to assure that salaries will be paid in due course and restricting expat colleagues will not result in what they are trying to achieve." the employees said in the letter.

The global reach of the troubled infrastructure lender is made apparent by the projects that they were involved in like road construction projects for joint ventures between IL&FS Transportation Networks Ltd. and Spanish firms Elsamex SA and Eco Asfalt SA. However the firm hasn’t stopped missing its debt payments even after well-known Indian banker Uday Kotak was asked to help the firm in it’s recovery as it reeled under it’s enormous debt.

One of the employees involved in the situation has been tweeting about the incident.

"We 7 employee from #ILFS are hostages by local labor/staff at in Ethiopia from last 4 days because of nonpayment of creditors and local salaries," Neeraj Raghuwanshi said in a tweet on Nov. 27, in which he tagged Prime Minister Narendra Modi. "#ILFS denied to send fund from India. Kindly save us. Day2day situation worsening."

Neeraj Raghuwanshi posted a screen grab of an email he wrote pleading for help, mentioning the IL&FS's local partner, the Ethiopian Roads Authority. He said the Authority would not take any action to help the detained employees before local staff were paid.