Moser Baer India employees await their dues and justice

Workers of MBIL have filed a writ petition against owners, bankers, management of Rs. 6,596 crore fraud.

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2,280 workers of Moser Baer India Limited (MBIL), the Greater Noida manufacturing company which was known for its CDs, DVDs and memory devices, are still awaiting their salaries of 16 months after the company was declared defunct on September 20, 2018 by National Companies Law Tribunal (NCLT).

Back in 2017, on November 1, as per a circular issued by the company, the plant was to be shut down temporarily till November 3 for conversion of Diesel Generator (DG) sets from Heavy Fuel Oil or HFO to alternative compatible fuel as per the Supreme Court order that banned HFO.

However, the company was on a lock out on November 4 when the workers came back to work. The notice put up by the company read, “The lock out of the company is top Management’s decision” and it will be reviewed in the next 2-3 days when a meeting is held.

Alleging “illegal termination and lock out” of the 114-acre plant by the company which resulted in workers who have spent more than 20 years with the company losing out on their jobs overnight on November 4, 2017, the workers approached a list of authorities seeking “justice”.

These included Gautam Budh Nagar’s District Labour Commissioner (DLC), Uttar Pradesh Chief Minister Yogi Adityanath, Prime Minister’s Office, Gautam Budh Nagar’s MP Mahesh Sharma among others.

Though the UP Labour Department, DLC, Insolvency Resolution Professional (IRP), Allahabad High Court and UP Governor held that the lock out was illegal, no case was filed against MBIL owners, MBIL Management, factory manager for locking a running plant having 2,280 employees, say the workers.

“Question should be asked to DLC, Gautam Budh Nagar as to why he did not initiate any action on this criminal offence in his area,” ask the workers.

The workers also say that they haven’t received their gratuity, Provident Fund (PF) and other compensations while the close associates of the company have received their gratuity in full even after the liquidation process was initiated.

“The IRP refused to pay gratuity to employees in full but at the same time, gratuity was paid to a total of 141 employees who were close to the top management and company owners. This was done in a planned manner. Also, they have are now given employment in other subsidiaries of MBIL group such as MBEL, MBPV, MBCEL and HPPL. This gratuity was paid before the company went to NCLT, during NCLT period and surprisingly, even after liquidation order by court in September 2018,” allege the workers.

The company on their part termed the agitation as an illegal strike resorted by workers on November 4, 2017 in a letter to the DLC, Gautam Budh Nagar. Meanwhile, the company also registered a trade union in March 2018 which as per the workers “never existed in the first place”.

The workers finally submitted a writ petition to the Supreme Court on December 21, 2018. In the petition, they state that through “misusing the NCLT law, owner Deepak Puri and his family have let the company be declared defunct”.

“We believe, the moment when over 2,000 workers who had worked for over two decades were terminated without notice in November 2017 was the first crime. It was in violation of labour rights,” Satendra Nagar, former Production Manager, Moserbaer India, who is one of the petitioners tells Delhi Post in an exclusive interview. Official communication from Moserbaer India to Delhi Post states that Deepak Puri would respond in the coming week as he is presently travelling.

Interestingly, Deepak is the brother-in-law of Madhya Pradesh Chief Minister Kamal Nath as he is married to Nath’s sister, Neeta Puri. During UPA 1 and 2, using Nath’s influence, the petition alleges that Rs. 6,596 crores was given as loan through multiple banks. The petition asks that like Amrapali, Jaypee and Sahara, Moserbaer India’s owners, management and Indian banks associated with the fraud “should be penalised”.

Also read: PNB Scam: A Corporate Governance Failure

When the banks started stressing on recovery in 2012, “the entire family moved their son, Ratul Puri from MBIL to Moser Baer’s profit-making company ‘Moser Baer Power Project’ which was renamed as ‘Hindustan Power Project Limited’ (HPPL)”. This was done to forgo off the bank loans on MBIL and to save HPPL from repayment of the loans taken from several banks.

The petition further alleges that from 2012 to 2017, the entire family along with banks kept restructuring the loans until by using NCLT’s law, the company was declared bankrupt.

“We initially thought that this was done to dispose of the liabilities when the funds started reducing but through the company audits, we workers, came to know that the entire proceeding was planned since 2009 when the UPA was in power. They had been taking loans and restructuring them as they understood that the business of CDs, DVDs was slowly phasing out,” states Nagar, who had been with Moserbaer for 16 years.

The workers further said that since the average age of workers is in the 40-50 years range, they “haven’t been able to get decent jobs” and have been “doing odd jobs” while several others remain unemployed.

The petitioners say that while six have lost their lives because of brain stroke, heart attack and stress, two workers are mentally affected after the incident.

During the #CIRP (Corporate Insolvency Resolution Process) period where an insolvency professional exercises the powers of the Board of Directors and manages the operations of the corporate, the family through their influence, is reportedly said to have not let any investor revive the company.

Though Finance Minister Arun Jaitley recently stated in a blog post that the Insolvency and Bankruptcy Code (IBC), 2016 has proved to be “extremely successful” when it comes to its effectiveness in resolving high ratio of Non Performing Assets or NPAs on the books of the banks within the country, the petitioners point out that employees of the liquidated company either don’t receive their dues in time or even if they do, they receive it in reduced shares.

The petitioners state that “The IRP rejected most of the employees’ claims which are related to employees’ livelihood and future” such as compensations/VRS. “Most of claims which are accepted by the IRP are admits in “Other dues of Insolvency and Bankruptcy Board of India (IBBI)” which are subjected to be paid on pari-pasu ration of banks which means that nothing will come in employees hand i.e. for a claim of five lakhs, only 35K will be paid,” said one of the petitioners.

However, stressing on his inability to comment on the petition, liquidator Anil Kohli told Delhi Post, “The liquidation proceedings are being conducted and verified. Soon, auction notice for sale of assets of company will be published. Workers have approached Supreme Court but the petition has not been served on me. Therefore, I am not in a position to comment.”

The workers say that unlike Vijay Mallya and Nirav Modi who have fled the country, the Puri family is still in the country and needs to be “brought to book”.

So what do they plan to do next? “We have been asked by our lawyer to get the authority letter with 2,000 signatures for the next phase of the petition proceedings. It seems to be a long battle, but one that is must for workers like us who have lost out on their livelihoods and happiness in a jiffy,” mentioned one of the petitioners, alleging that it seems, “the Puri family is trying to buyback the factory through Kamal Nath’s sons who are in the business line”.