The Pramod Mittal-promoted Global Steel Holdings Ltd confirmed Monday it has paid three months’ salary arrears to Indian workers in two of its Nigerian units last week and pledged to clear remaining dues pending since July by May 15. All arrears in local allowances—paid in the local currency, Naira—will be cleared by the end of this month, said an executive from the corporate communication department at Ispat Industries Ltd.
Mittal and his younger brother, Vinod Mittal, alongside other promoters, also own 45.95% of the publicly traded Ispat, in which the closely held Global Steel owns 2.63%.
The company’s announcement, confirmed by workers, comes after several articles in Mint about Global Steel’s failure to pay Indian hires across its operations in Nigeria, Bulgaria and Libya.
On Friday, after Mint reported that workers in Libya also had not been paid for months, Global Steel director Ashok Agarwal sent a three-page letter defending the company and Mittal, who is the brother of steel tycoon and Arcelor-Mittal head Lakshmi N. Mittal. The company did not respond to queries from Mint before the story ran.
“In Nigeria, Global Steel has been facing a hostile government which has gone back on its commitments in the agreement with our company, which had adversely affected our operations there, resulting in huge losses month after month. However, still we were making payments to our thousands of employees. Of late, however, our company’s bank account was frozen by the Nigerian Government, leaving us helpless in doing any fund transaction in that country,” Agarwal wrote. “Against all these odds, as a responsible and caring corporate, we are taking measures to open individual accounts for making payments to our employees.”
Agarwal said the company was in the process of paying back workers in Nigeria.
The first tranche of payment was made from its Dubai office on Friday and “sent to respective accounts (of employees) in India,” according to Suman Das Sarma, Ispat’s vice president of communication strategy. Ispat’s Mumbai offices did much of the hiring for Global Steel’s operations overseas.
Sarma said the payment schedule will be for employees currently located at the Ajaokuta steel unit and National Iron Ore Mining Company Ltd in central Nigeria; Global Steel’s management contracts for these two plants were revoked by the Nigerian government 20 days ago.
For those working at the Delta Steel Co. Ltd, he said, only one month’s salary has been released; the rest “will be gradually settled,” Sarma said.
Employees at the Ajaokuta steel unit confirmed that a meeting was called by the Global Steel management at 7pm Nigerian time on Friday evening last week, the day Mint reported that employees were refusing to return from Nigeria without full payment.
At least 47 Indian executives, some with wives and children, have refused to return home until paid. The company said it will deal with those who have already returned “according to the terms of employment,” said Sarma.
In the meeting Friday, workers said acting chief executive S. Das Adhikari and human resources head Brajesh Singh, informed them that “three month’s salary between January and March 2008” has been paid.