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In its latest attempt to raise the Rs 2,000 crore that its real estate arm Jaypee Infratech owes homebuyers, Jaiprakash Associates Limited (JAL) is passing the hat around its employees. Chairman Manoj Gaur has written to staff beseeching them for financial help.
Gaur’s letter, a copy of which has been seen by Moneycontrol, says: “The company is trying to prove its trustworthiness and bonafide in the Supreme Court but at this time the company seeks your help to come out of the crisis it currently faces.”
“You have always stood by the company’s side whenever it faced a crisis whether it a was fire in a hotel or at the time of 2013 devastation caused by floods in Vishnuprayag. This time too when the company faces a crisis, it seeks your help to come out of it,” he says in the letter.
“Your cooperation is once again needed during this difficult situation. You can contribute as per your capability and willingness. Your contribution big or small is invaluable to us,” he says.
He promised to repay the amount borrowed from employees in nine instalments starting January. It also asked employees to provide their consent by November 18, 2017.
The company spokesperson refused to confirm that such a letter has been sent out. “I am not confirming….no letter has been issued so far.”
Other sources confirmed to Moneycontrol that only senior employees have been sent this letter. They said that the contribution will be voluntary and the amount will be returned in nine equal instalments after January 2018.
Some employees said that they have been informed by senior colleagues to sign authorisation forms and give their approval for deduction of the amount they wish to give to the company from their salary. This is a loan we are expected to give to the company and we have been promised that it will be returned to us after January in nine equal instalments.
“Most employees will be happy to give this loan as some of them have been working with the company for over 30 to 35 years. The amount to be given will depend on the rank of the employees. We have been given time until November 18 to give our consent,” they said.
On Monday, the Supreme Court had come down heavily on Jaiprakash Associates Limited (JAL) for missing the fourth deadline to deposit Rs 2000 crore with the court’s registry towards refunding homebuyers and ordered that all non-institutional directors of the parent company be present before the apex court on the next date of hearing on November 22 and also directed the amicus curiae to set up a portal for homebuyers.
The SC directed all non-institutional directors of the parent company be present at the next hearing and present their affidavits disclosing their personal assets, the order said.
Legal experts said that when a company is in distress and loans are difficult to come by, it is the company and not the employees who are expected to find a way out of the situation. “When the company is in distress and loans are not available from financial institutions, the promoters are expected to infuse funds and bail out the company, not the employees. The situation in which JAL and JIL are in today is not because of the employees, but because of poor judgment of and mismanagement of thousands of crores of public money by the promoter’s family and the directors of these companies. Therefore, the promoters and the directors of JAL should bring the funds for homebuyers to the table. After picking the pockets of home buyers, Gaurs are now set to short their employees,” says Abhishek Dubey, a lawyer based out of Delhi and also a Jaypee homebuyer.
“This is an aftermath of the November 13, 2017 order of the Supreme Court where the honourable justices ordered personal presence of directors of JAL along with affidavits on personal assets. This letter to employees is not in the form of a request to the employees to contribute. If one reads the operative line, it mandates the employees to provide their consent by November 18, 2017. Law does not permit such arbitrary conduct by a company against its own employees,” he says.
On Monday, the Supreme Court appointed amicus curiae Pawan Shree to create a website for home buyers to enter their claims. In a brief hearing on November 13, the focus was on the failure of JAL to deposit Rs 2000 crore with the Supreme Court. JAL mentioned that they have Rs 593 crore lying in an account with ICICI Bank. JAL also mentioned that they have a cheque of Rs 100 crore in a sealed envelope for depositing with the Supreme Court.
JAL had on Monday mentioned that they can deposit Rs 693 crore but they require an order from the Supreme Court asking ICICI Bank to release Rs 593 crore. But ICICI Bank opposed the above on the ground that the Rs 593 crore lying in that bank account is not free floating money, and has been deposited in that bank account specifically for the benefit of the lenders of JAL. Considering ICICI Bank’s objection, the Supreme Court did not allow JAL to withdraw the Rs 593 crore from ICICI Bank, lawyers present at the hearing had said.
The committee of creditors had met on last Friday to discuss the expressions of interest from the prospective bidders. Steel, energy and cement conglomerate JSW Group, metals and commodities giant Vedanta, the Mumbai-based Lodha Group and Deutsche Bank are among the 18 companies that have shown interest in buying Jaypee Infratech. Among other parties who have expressed interest include Essel Highways, Lodha Group, L&T, Cube Highways from Singapore, Kotak Infra, SARE Group, Deutsche Bank, Asset Reconstruction Company (India) Limited, Suraksha Realty, Tata Realty.
The resolution professional is likely to split the project into three parcels with the 27 real estate projects being one block, the expressway being the second and the hospital being the third.
Earlier, the Supreme Court had directed JAL to keep Rs 2,000 crore ready before November 6. The court had also refused to permit a part deposit of Rs 400 crore offered by the company every month from January 2018.
Last month, the top court had refused permission to embattled Jaypee to hive-off the rights of multi-crore six-lane Yamuna Expressway connecting Greater Noida with Agra in Uttar Pradesh.
On September 11 this year, Supreme Court on Monday directed Jaypee Associates, the parent firm of its real estate firm Jaypee Infratech, to deposit Rs 2,000 crore by October 27. The apex court also asked the NCLT-appointed interim resolution professional (IRP) to take over the management of Jaypee Infratech and submit a plan to protect the interests of homebuyers and creditors within 45 days.
Supreme Court has also barred the Managing Director and Directors of Jaypee Infratech and Jaypee Associates from travelling abroad without prior permission of the court. A bench headed by Chief Justice of India (CJI) Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud asked the IRP to submit a resolution plan within 45 days to the court, which shall indicate the protection of interests of homebuyers and the creditors.
The bench also appointed an amicus, who would participate in the meetings held by the IRP to espouse and protect the cause of homebuyers.
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