Usha Martin workers accuse MD of diverting funds

Hind Mazdoor Sabha-led Engineering Labour Union at the Usha Martin wire rope factory in Ranchi has alleged that Rajeev Jhawar, managing director of the company, has been draining out funds from the business and transferring them to Singapore for the last three-four years, depriving workers of their due salaries. The trade union has written to Jharkhand chief minister Raghubar Das expressing apprehension that Jhawar might fled the country leaving workers in a hopeless state. Anjani Kumar Pandey, said they had demanded sale of the wire rope business to the Tatas. Company sources said the letter from the trade union was a fallout of the family feud that was continuing since Rajiv Jhawar took over as the managing director of Usha Martin replacing Prashant Jhawar. While after the sale of the steel business to the Tatas Usha Martin founder BK Jhawar expressed doubts over utilisation of proceeds and sought a break-up of how the money would be used, Rajeev Jhawar said most of the proceeds of the slump sale which will rangebetween Rs 4,300 crore and Rs 4,700 crore would go in repaying debt, which amounted to Rs 4,500 crore.

The proceeds would help Usha Martin deleverage its balance sheet. While Rajeev Jhawar called for a settlement between the two owners – Brij Jhawar and his son Rajiv Jhawar and Basant Jhawar and his son Prasant Jhawar in January this year, earlier in December 2017, Basant Jhawar accused Rajeev Jhawar of fund diversion and wrote to the Prime Minister’s Office and the finance ministry seeking detailed investigation into Rajeev Jhawar’s foreign accounts. The letter also alleged that the company’s financial performance declined owing to deliberate mismanagement and rampant diversion of funds and manipulation of its share price. Basant and Brij Jhawar has 25.5% share each in the business. Basant Jhawar was the chairman of Usha Martin till 2010 and Prashant Jhawar till April 2017. Brij Jhawar is a non-resident Indian for the past 20 years. While Prashant Jhawar moved the Calcutta High Court and the NCLT challenging Rajeev Jhawar’s takeover as the managing director, both the promoters agreed to the sale of the steel business to the Tatas. However, sources said that though Basant Jhawar abstained from the board meeting that finalised the decision of selling the steel asset at Jamshedpur to the Tatas, later in a release, both Basant and Prashant Jhawar welcomed the decision. Usha Martin reported a net loss of Rs 2.68 crore in FY 18 and its net worth during the last fiscal stood at Rs 7.61 crore.

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