Ho­tel Sar­a­vana Bha­van de­faults on ESI, PF dues

Prom­ises To Clear All In A Phased Man­ner

The Times of India (New Delhi edition) - - Times Global - [email protected]

Chen­nai: The coun­try’s best known South In­dian food chain Ho­tel Sar­a­vana Bha­van has de­faulted on statu­tory pay­ments such as prov­i­dent fund and Em­ploy­ees’ State In­sur­ance

(ESI) Cor­po­ra­tion dues. Its founder P Ra­jagopal had died in July af­ter be­ing con­victed in a mur­der case.

At an in­quiry on Thurs­day, se­nior man­agers of the restau­rant chain are un­der­stood to have ad­mit­ted to the Prov­i­dent Fund Com­mis­sion­er­ate that they owe more than Rs 20 crore to the PF depart­ment. They promised to clear the dues in a phased man­ner. PF depart­ment of­fi­cials told TOIthat cal­cu­la­tions of dues were un­der way and it could be more than what the ho­tel chain has men­tioned. The next hear­ing is sched­uled for Septem­ber 30.

“We have paid PF set­tle­ment of more than Rs 1 crore last month. We in­tend to pay an­other Rs 3 crore by March 2020. We are si­mul­ta­ne­ously set­tling dues with ESIC and are try­ing to bring down the de­fault sum,” Sar­a­vana Bha­van head (HR) T Si­vasankaran told TOIafter PF hear­ing.

The ho­tel chain has 3,190 em­ploy­ees (do­mes­tic) at present and is not look­ing at any lay­offs for now, but would re­strict its busi­ness. Some of the branches, in­clud­ing the one in Pondy Bazaar in Chen­nai, have closed down.

“Our lease in Pondy Bazaar was over and we didn’t get enough park­ing space. So we shut that down. We are re­vamp­ing the whole net­work and we will bounce back pretty soon,” HR head said. Moves are afoot to re­struc­ture and re­design branches not mak­ing a profit, he said. The chain has also made changes in se­nior man­age­rial po­si­tions in­clud­ing new au­di­tors. “We are let­ting go of some old hands and bring­ing in new ones,” Si­vasankaran said.

Sar­a­vana Bha­van is a story of rags to riches. Founded by school dropout Ra­jagopal, who ran a grocery store in KK Na­gar in Chen­nai, it be­came a syn­onym for qual­ity veg­e­tar­ian food across the world. Ra­jagopal, who came to be known as ‘ An­nachi’, de­cided to open a restau­rant in 1981 and grew the chain from strength to strength on back of pro­vid­ing clean and tasty food in an era where veg­e­tar­ian dishes were doled out in dingy joints. He died in July this year af­ter a court con­victed him in a mur­der case.

His two sons, Shiva Ku­mar and Sar­a­vanan, have been run­ning the busi­ness for the past few years. “An­nachi was a phe­nom­e­non. He knew the trade as the back of his hand. lue of in­vest­ments held by Mor­gan Cred­its in Yes Bank is key rating sen­si­tiv­ity,” the agency said.

Yes Bank pro­moter Rana Kapoor said, “With the sole in­ten­tion of re­duc­ing debt of the pro­moter hold­ing com­pany — Mor­gan Cred­its, owned by my three daugh­ters, it was de­cided to bring down our­fam­i­ly­own­er­ship­inYesBank to 7.4%.” Mor­gan Cred­its said the fund­sre­alised­fromthe­sale­would be used to pre­pay sub­stan­tial por­tion of its NCDs sub­scribed by var­i­ous schemes of Re­liance Nip­pon Life As­set Man­age­ment. Given the pre­vi­ous clos­ing price, a 2.4% stake sale would have gen­er­ated less than Rs 400 crore for Mor­gan Cred­its. So far, the com­pany has pre­paid Rs 722 crore to NCD in­vestors.

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