Financial Daily from THE HINDU group of publications
Tuesday, Mar 16, 2004
Trade & Labour Unions
Alacrity Housing staff on strike seeking wages
Employees of Alacrity Housing Ltd belonging to the CITU assembled outside the head office in Chennai on Monday protesting against non-payment of wages. Bijoy Ghosh
Chennai , March 15
THE employees' union of Alacrity Housing Ltd, affiliated to CITU, have been on strike for the past one week because the company has not paid their wages for the past 15 months, according to the employees who assembled on Monday in front of the company's office. The labourers have not been paid for the past five to six weeks.
The employees said that they had a lot of trust in the company, but had now lost it. They had raised personal loans for their housing finance scheme. But this had not taken off too.
Mr Amol Karnad, Chairman, Alacrity Housing, told Business Line that this this had happened because of some management mistakes.
Giving a brief background, he said Alacrity's effort has been a risky venture from the beginning. In 1996-97 when there was an artificial boom several big names entered the market. The company, by then, was far too entrenched.
In 1997-98, the recession started by which time Alacrity had made other investments into suburban land. There was a build-up of bank borrowing volumes and banks were charging an interest rate of 17.5 per cent. The interest and overhead cost were high and were eating into working capital while the sales were not geared for this.
The next thing that hit the company was the regularisation scheme brought in by the Government. The company's sanctions were getting delayed, which meant that the projects were also being delayed. This, Mr Karnad said, was a big setback.
The customers were getting jittery and the cancellations started, followed by refunds, while the interest continued to pile up. "In the short-term, we tried to convert term loans to working capital. We asked employees and workers to stretch themselves to keep Alacrtiy going; then the doubts began,'' he said.
At this time, the company entered into an agreement with Haridas Builders to take over and start the construction sites and some of the workers were transferred to these sites. These workers were used to Alacrity's management style and found the new style different.
"We will be able to clear the workers' dues in the next three to four months. We were the only company that paid the labourers provident fund, as a welfare measure but soon this became a burden. The total amount due to the labourers is Rs 7 lakh. The employee salaries will be cleared in five to six months.'' he said.
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