Hindustan Motors on Monday released half of the monthly wages of December 2013 as an “advance payment” to 2,600 employees of its non-operational Uttarpara plant in West Bengal. This has been done “on request of the Labour Minister” of West Bengal, a statement from the company said.

Minister Purnendu Basu told Business Line the payment of ₹7,000 to each employee was made through cheque.

“Funds accrued out of the sale of scrap were used towards disbursing the advance wages,” the company added. Employees received last wage payment in April for the month of November. On May 24, the management clamped a notice of “suspension of work” on the plant’s gate, citing fund shortage. Employees are not entitled for wages for the work suspension period. The management is slated to meet the Labour Minister later this week.

“Given the critical shortage of funds, one of its key priorities in the immediate future is to significantly pay off statutory payments and wages as and when it receives funds,” said the company, which used to make the iconic Ambassador cars.

Till April-end, the company had accumulated liabilities of around ₹94 crore, comprising sales, land tax dues, wage arrears, pending electricity bills, and dues to suppliers.

“The company has sought the State Government’s help in enabling the closure on the forge and foundry (divisions of the plant) divestment,” the company said.

“Prior to suspension of work, the monthly operational losses incurred were around ₹7 crore on account of the inability to recover even 20 per cent of its monthly fixed expenses.”

Given the negative net worth as on December 31, the company had made reference to the Board for Industrial and Financial Reconstruction in February.

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