KOCHI: FACT-RCF Building products Ltd (FRBL), a joint venture between Fertilizers & Chemicals Travancore Ltd, Kochi, and Rashtriya Chemicals and Fertilizers Ltd (RCF), Mumbai, which is into gypsum-based building products such as load-bearing walls and wall plaster, has been shut, rendering about 110 employees jobless overnight.
The company — formed in 2009 by setting up a Rs 150-crore plant at Ambalamedu -- has given notices to its nearly 100-plus workers, top sources said. When contacted, C P Dinesh, managing director, FRBL, told TNIE that the shutdown of the plant follows a court order after the company defaulted on a loan payment to a Mumbai-based private bank. He confirmed that 100-plus workers have been given the pink slip. He, however, added that FRBL’s another vertical – the management consultancy wing - will continue to function.“The plant has been shut for the past two months. We will give all the benefits to the workers, who have been served with notices, as per government rules,” said Dinesh.
He said the company defaulted on a loan of Rs 22 crore. “We have given Rs 10 crore as interest alone to the bank. According to the bank, we still owed more than Rs 22 crore, inclusive of the accumulated interests. We have been trying for a one-time settlement, but without any success,” he said, adding that FRBL had settled loans from two other banks earlier.
A letter issued by K K Linraj, manager (HR&A) of FRBL, to employees, said the FRBL plants have been non-operational from October 10 this year as per the Additional Chief Judicial Magistrate Court, Ernakulam, order dated September 9, and the company will be unable to provide “any job and salary with effect from December 26, 2019”, said the letter, a copy of which is in possession of TNIE.
The letter said the company has paid salary to all employees in October and November and also intends to pay salary till December 25, 2019, but not beyond due to fiscal stress/lack of revenue.It said as per the court order, FRBL was advised to shut down its plants and also empty its LPG storage facility to facilitate handing over to the Omkara Asset Reconstruction Company (OARC) in Mumbai. “A writ petition has been filed by the trade unions of FRBL at the Kerala High Court challenging the ACJM Court order, which is sub-judice,” the letter said.
The entire operations of FRBL are now stalled and OARC is in the process of taking possession of the plant and machinery, the letter said. “In view of this, as per the management directive, we are unable to provide you any job with effective from December 26, 2019. All eligible benefits and notice pay/compensation as per relevant rules and Acts shall be paid to you,” the letter said.
Sources said mismanagement and embezzlement have been the major reasons for the downfall of the Ambalamedu-based company. They also pointed the fingers at former FACT chairman and managing director Javeer Srivastava, who brought in his close aides to manage the affairs of FRBL. The Central Bureau of Investigation had recently indicted Srivastava for corruption in the gypsum deal when he was FACT’s CMD.
FRBL - a 50:50 JV between FACT and RCF, Mumbai
Established in 2009
Total employees - 130
Employees asked to leave - 110
Products - Glass fibre reinforced gypsum wall, gypsum-based wall putty and wall plaster
Project management consultancy division to continue