The expatriates in Ethiopia have claimed that they are being held hostage by local staff that haven’t been paid after the shadow lender Infrastructure Leasing and Financial Services Ltd. began defaulting on $12.6 billion in debt. The foreign ministry is currently investigating the claims.
It is reported that, seven Indian workers from infrastructure financing firm IL&FS, which rocked financial markets after it began missing debt payments in late August, have been detained since November 25, this year. The detainees are kept in three sites in Ethiopia’s Oromia and Amhara states by unpaid local staff, according to an emailed letter from the employees.
They mentioned in the letter that the possible termination of some road projects being built by Indian and Spanish joint ventures may have triggered local employees to panic.
The employees also mentioned that the officials are taking the side of locals against the expatriate staff and that they were caught in the ‘middle of corporate disagreements, blame games and bureaucratic issues’.
Alemayehu Ejigu – Oromia’s police commissioner general, the state’s deputy spokesman Deressa Terefe, and Amhara state’s spokesman Nigusu Tillahun didn’t immediately respond to two calls and two text messages.
“Closely following up with local Ethiopian authorities and IL&FS management to resolve the issue,” said an official at the Indian embassy in the capital Addis Ababa. In the meantime, a separate official in the foreign ministry in New Delhi confirmed they were looking into the matter. A spokesman for IL&FS declined to comment.
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 employees wrote, “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 organisation to pay their salaries,”
Can’t Send Funds
As mentioned in the letter, management cited restrictions imposed by the Reserve Bank of India for its inability to send funds. IL&FS had defaulted on paying both taxes and local employee pensions for nine months, the letter said. Meanwgile, Ethiopian Revenue Ministry spokesman Addis Yirga and Attorney General Office spokesman Zinabu Tunu said by phone they couldn’t comment on the employees’ concerns expressed in the letter.
“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 further said in the letter.
Apparently, the detention of IL&FS employees in Ethiopia, who were reported to be working on road construction projects for joint ventures between IL&FS Transportation Networks Ltd and Spanish firms Elsamex SA and Ecoasfalt SA, illustrates the sprawling nature and global reach of the beleaguered infrastructure lender.
Notably, the firm hasn’t stopped missing debt payments even after the Indian government fired the lender’s board and tapped well-known Indian banker Uday Kotak to help lead the firm’s recovery as the company reeled under $12.6 billion of debt.
Spain’s representatives of Elsamex SA and Ecoasfalt SA, were not immediately able to comment when contacted on their office numbers on Thursday.
Asking for Help
The letter read, several men identifying themselves as IL&FS employees in Ethiopia, who didn’t respond to requests for comment, have been tweeting Indian politicians asking for help.
Neeraj Raghuwanshi said in a tweet on Nov. 27, in which he tagged Prime Minister Narendra Modi, “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.”
Mr Raghuwanshi also posted a screen grab of an email he wrote pleading for help, mentioning IL&FS’s local partner, the Ethiopian Roads Authority. He further said the Authority would not take any action to help the detained employees before local staff were paid.
Habtamu Tegegne- Ethiopian Roads Authority director general, didn’t immediately respond to two calls to his office phone. The Spanish ambassador to Ethiopia, Borja Montesino Martínez del Cerro, didn’t immediately respond to two emails seeking comment.