The National Company Law Tribunal (NCLT) has fixed January 24, 2021, to hear the grievances of over 2,500 former employees of bankrupt travel company Cox and Kings who have not been paid salaries from June 2019 to October 2020.
The ex-employees of the company, majority of them now on hand-to-mouth existence, have asked a resolution professional at the bankruptcy court for roughly Rs 100 crore to settle their dues. The pending salaries of the former employees range from Rs 3 lakh to Rs 70 lakh.
“We have petitioned the NCLT for an interim payment. We are asking for a small amount which is less than 3 percent of the cash that is outstanding to the banks,” Kailash Date, a former member of the company’s meetings, incentives, conferences, and events (MICE) wing, told MoneyControl.
Creditors (read banks), whose loans to the bankrupt travel company remain unpaid, have demanded Rs 7,000 crore.
The ex-employees are hoping the NCLT will hear their plea compassionately.
Date said Cox & Kings promoters repeatedly failed on their promises to pay outstanding salaries. “It started from June last year till the company closed all operations in October, 2020. We continue to be in the dark.”
A senior official at the NCLT told MoneyControl that the wait for cash could be very long because the resolution professional was yet to start the process of going through the demands of the ex-employees.
The demand from the ex-employees was one part of the case, the other was the demand from the banks. And unless the resolution professional has checked both the demands, hearings will not start. Until then, both former employees and creditors will have to wait.
A Committee of Creditors (CoC) constituted for the bankruptcy proceedings of Cox & Kings has had three meetings and will present its case before the NCLT about the recoveries, according to people familiar with the matter. They didn’t want to be named.
The case could undergo several changes as more and more creditors join the queue. “It is going to be a long haul. Companies where promoters dump employees without paying their dues are filling the NCLT in large numbers,” said the official, who spoke on conditions of anonymity.
Srinivas Yale, a former Cox & Kings employee, said the NCLT was the last recourse for the former employees.
Bleak financial future
Expectedly, the unpaid ex-employees are going through severe financial crisis and hardship. “Many are doing all odd-jobs to survive. And we are not hearing anything from the company except cases of money laundering, investigations by the cops, and arrests. What do we do to get our unpaid cash?” asks Yale.
Yale said the former employees are in total despair. Unpaid salaries have pushed them into driving autorickshaws, selling fish and juices, or vegetables.
“I used to book tickets for the US and London, today I sell fish to make a living. It's very humiliating, but I do not have any options,” said Keshav Rane, a resident of Mumbai.
Rane, who has dues worth Rs 70 lakh pending from the company, told MoneyControl that he finds selling fish very humiliating. “I have not been paid my dues, and I have a family to feed. It is very tough to work with fish sellers every day.”
His colleague Kiran Waghmare, a former senior manager, has dues worth Rs 70 lakh after 13 years of service. He sold all his jewellery to sustain his family but now is down with cancer. Yale said Waghmare’s friends are paying for his treatment. Waghmare wants to sell his ancestral house but is unable to find a buyer. “The markets are down, and he will not get a good rate,” says Yale.
A former reservation manager, Pratik Talegaonkar, is now selling vegetables and juices to various housing societies. “I do not have space to start a store, so this is the best option. Once my salary was Rs 70,000. Now I earn Rs 25,000. The NCLT is our only hope,” he told MoneyControl in a Zoom chat.
Investigation into alleged scam continues
Meanwhile, investigation into the alleged Rs 20,000-crore scam is far from over.
The Enforcement Directorate said it has traced a fresh set of people allegedly linked to money laundering in the alleged scam. These, claimed the investigating agency, were some fictitious companies set up by the promoters and top officials of the bankrupt travel company to park benami funds abroad.
Highly-placed sources in the ED said unlike claims by the promoters and top officials of Cox & Kings that it had closed its operations across the world, the investigating agency found that some subsidiaries of the defunct company were still operating. Among these were Cox & Kings Global Services, which was still operating in the US. This company, the ED found, was completely insulated from the Indian operations by the promoters.
ED officials told MoneyControl that bank officials who dealt with promoters and top officials of Cox and Kings would be questioned if they followed proper procedures and sought collaterals before sanctioning loans to the company.
The investigation could be a long process. And then, the trial will start. Meanwhile, distraught ex-employees of Cox & Kings wait endlessly for their cash.
(Shantanu Guha Ray is a senior journalist based in New Delhi.)
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