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The tussle between the founder of Sagar Ratna, the popular South Indian restaurant chain, and the present management led by private equity firm India Equity Partners (IEP), is taking a turn for the worse.
Older employees who’d worked under founder Jayaram Banan are set to move court against the new management, alleging siphoning of their pension and gratuity money, allegedly by forging documents. The current management fully denies the charges.
According to a document sent by a high court advocate on May 2 on behalf of 11 older employees, addressed to Murali Krishna Parna, Chief Executive Officer, Sagar Ratna Restaurants (P) Ltd, the complainants (Old Employees of Sagar Ratna Hotels (P) Ltd) have sought registration of complaints lodged at various police stations in Delhi against Parna and various others in the company and IEP.
The document also mentions an employee, Vasant Saliyan’s complaint to the labour commissioner on the same lines. It also says the older employees are going to approach the police’s economic offences wing and that the new management had committed ‘non-bailable, cognizable offences”. However, the new management under IEP has denied all the allegations. it has said Sagar Ratna Restaurants Pvt Ltd and its management have fully complied with all rules on labour-related matters, including those on PF and gratuity.
According to an official spokesperson with the chain, some erstwhile employees and their lawyers have either misunderstood the issues or are acting with ill intent. In his response to a query sent by Business Standard, he said, “The restaurant business was transferred from the erstwhile company - Sagar Ratna Hotels Pvt Ltd to Sagar Ratna Restaurants Pvt Ltd (with IEP owning the majority) and as a part of a legal agreement, Sagar Ratna Hotels Pvt Ltd and its promoter, J R Banan, were liable to clear all dues (including gratuity and PF) of the employees that were being transferred to Sagar Ratna Restaurants Pvt Ltd as a part of the deal.”
According to him, Banan had incorrectly represented to the erstwhile employees and some current employees of Sagar Ratna Restaurants that the firm was responsible for clearing even past employee dues as a part of the deal, which was false.
Denying the allegations, he said, “Sagar Ratna also clearly denies any siphoning of PF money. Sagar Ratna Restaurants Pvt Ltd is contemplating legal action against the advocate for defamation and various infractions under the Information Technology Act.”
On these allegations, Jayaram Banan, founder, Sagar Ratna Hotels, said: “Sagar Ratna Hotels Pvt Ltd has fully discharged its contractual and legal obligations towards its employee. Any allegations to the contrary are untenable.”
In October, Business Standard had reported about the tussle between Banan and IEP. When it escalated, a few seniors at IEP, including founder and managing director Gaurav Mathur and principal Abhishek Sharman, who were part of the management of Sagar Ratna, had quit both the chain and IEP. In December last year, Arvind Nair, chief executive and director of Sagar Ratna, had done likewise.
According to sources, IEP had not responded to the offer made by Banan family for buying back IEP’s 73% stake in Sagar Ratna Restaurants for Rs 132 crore. Jayaram Banan valued the restaurant chain at Rs 172 crore, the same valuation at which IEP bought the chain in 2011. Currently, Sagar Ratna owns about 60 restaurants, while another 35 are run as franchises.
Banan runs another chain, Swagath, in New Delhi. In 1986, Banan had started the first Sagar Ratna branch in Defence Colony in South Delhi, with a seating capacity of only 40. Now, the chain has outlets across Haryana, Himachal Pradesh, Punjab, Rajasthan, Uttar Pradesh, and the National Capital Region.
IN BAD TASTE
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Older employees who’d worked under founder Jayaram Banan are set to move court against the new management, alleging siphoning of their pension and gratuity money, allegedly by forging documents
- However, the current management fully denies the charges
