Absolving all other directors from any personal liability for Subhiksha's current period of default, the regional provident fund commissioner has asked the discount retailer's MD R Subramanian to immediately pay the entire due, totalling little less than Rs two crore.
"... It is found that most of the day-to-day functions were attended by R Subramanian, Managing Director, even though ICICI Venture Ltd has substantial interest in the running of the establishment," the commissioner noted after an enquiry into the providend fund default by crisis-hit Subhiksha.
Subhiksha has said that its 15,000 employees have not been paid since October last.
"The specific personal responsibility or involvement of the nominee directors and independent directors is found not established. Accordingly, the nominee directors and the independent directors other than R Subramanian are found not personally liable for the current period of default on the part of the establishment," the commissioner stated.
However, the financial responsibilities of the investors and bankers continue as per law, he added.
The dues, which needs to be paid immediately by Subramanian works out to be around Rs 1.76 crore, it added.
Commenting on the EPFO enquiry, the company has said that its MD R Subramanian has offered the PF amount in his personal account "to be adjusted and treated as paid on behalf of the company towards part payment of the arrears and the request is being processed by the EPFO."
On reports that Subhikhsha has opted to repay a Rs 15-crore loan to a shareholder despite not being able to pay staff salaries and arrears, the company said about "Rs 14 crore was repaid during early January 2009 to a shareholder in part repayment of the lifeline granted by them in December 2008 and the company repaid this as it was contractually bound to do so as per its arrangement with the said shareholder."
The company said it was "committed to pay the arrears of salaries and understands the pain of the 15,000 employees who are unpaid since Oct 08 but that it was helpless in the matter of repayment of the said loan for the reason that the contract with the said shareholder provided no option to the company."
