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Some Sahara Staff Not Paid Salaries For Months
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Some staff at conglomerate Sahara say they haven't been paid for several months, as the company tries to raise $1.6 billion to bail its boss Subrata Roy out of jail.
Reuters interviewed 11 employees independently contacted in separate units in Delhi, Mumbai and Lucknow this week, and found workers at what was once one of India's highest profile firms frustrated over a lack of information about the group's future. Business has been disrupted for a year as Sahara fights a regulator's charge that it illegally sold bonds and did not reimburse investors.
The employees' claims could not be independently verified, although an undated letter to staff signed by Roy and seen by Reuters asked for patience from those who hadn't received what they were due.
"There is not much work to do and we have not received any salary since September," said an official at Sahara's "Command Office" headquarters in the northern Indian city of Lucknow, where founder Roy's family lives in a gated complex.
Sahara did not respond to requests for comment on the letter to staff, which three employees said was posted in late December after workers questioned salary delays.
In response to queries about unpaid wages, Sahara said it faced a "liquidity crunch" due to conditions imposed by the court on its use of funds and a freeze on bank accounts, creating problems in meeting some of its financial obligations. It denies having failed to pay some staff for four or five months, calling that "completely untrue".
"We are working to diffuse this crisis, which has also created grave difficulties for our employees. Sahara India is one big Pariwar (family) and all the employees are its members, who are standing together in these difficult times. With our dedicated employees and the strong fundamentals of the group, we are hopeful that we will soon come out of this crisis," a Sahara spokesperson told PTI.
"In some business divisions, salaries of our employees have got delayed by many months. However, situation is better at those divisions which have their own fund-flow like the Group's luxury hotel Sahara Star in Mumbai, resort town Aamby Valley City and the 500-bed tertiary care Sahara Hospital in Lucknow."
The letter to staff, posted on an employee notice board, said the company's fortunes would change after March, when Sahara expected to raise funds for bail.
"If you are not receiving what you are due immediately, then wait with patience and trust," the letter said. "After 37 years of trust, I am asking you for just four months - December, January, February, March. Please keep your faith and love in us."
The pressure over payroll described by employees suggests the depth of trouble at Sahara, a conglomerate whose assets stretch from Formula One to property and TV. Chairman Subrata Roy has been held in a Delhi jail since last March, after he failed to comply with a court order to repay investors in a bond programme that was ruled illegal.
The bail amount reflects the cost of the programme, estimated by Indian regulators to be as much as $7 billion.
Sahara has told the court it has paid most of the outstanding dues directly to the bondholders. India's markets regulator, which is seeking redress for millions of investors, disputes that.
'World's Largest Family'
In its statement to Reuters, Sahara blamed its battle with the regulator and said it was "releasing the salaries (from) time to time, based on fund flow, on a continuous basis. There are delays of a few months, but it is completely untrue that the company has not paid to some of our staff since 4-5 months."
One senior official in Mumbai said there was little clarity on when back wages would be paid.
"When we call up (human resources), they simply tell us they are in the same situation," the official said.
Several workers said they were reluctant to quit because they felt employers would be more likely to hire someone who already has a job. Some had already found other employment.
Sahara says it employs about one million salaried and "field workers" who collect payments. The company refers to itself as "the world's largest family" under flamboyant founder Roy, known as Saharasri, or "Mr Sahara".
Since Roy's imprisonment, Sahara has been trying to raise bail money using its properties, including New York's Plaza hotel and Grosvenor House in London.
Talks with US-based Mirach Capital Group to raise $2 billion collapsed this month after Reuters reported that a bank letter underpinning a proposed deal was forged.
Sahara told the top court this week it was considering other proposals to raise funds, including selling a luxury development outside Pune, two hours from Mumbai.
It is unclear whether Sahara can stitch together another deal, and no potential bidders have emerged since the Mirach deal collapsed.