In the latest twist in the ongoing saga concerning construction giant Joannou & Paraskevaides Group, staff at J&P Overseas’ Saudi Arabia operations have threatened to down tools if they are not paid some 80m Saudi Arabian Riyals ($21.3m) they are owed by the end of August.
In a May 24 letter to CEO Andreas Papathomas, seen by the Sunday Mail and signed by 822 people, the workers expressed concern over their overdue payments for February, March, and April, as well as annual package balances for the past three years.
Most of the 5,500 staff has not been paid since February though for some it has been longer than six months. Saudi nationals working for the company have been paid until April.
The staff said they had remained loyal to the company during the difficult period it was going through and by doing so they had unwillingly contributed to its financing to the tune of around SAR80m.
They said that they had expected a similar gesture from Papathomas, “and at the very least to reimburse” them with an equivalent amount to prove his commitment to the survival of the company.
However, they said, events in the past few months left them with little faith that the overdue sums will be paid.
The workers said they were putting the company “under final notice” that as a minimum they wanted a written commitment from the board by May 31 that outstanding salary payments for all employees were secured and that they would be paid in strict accordance to a timeframe they provided ending on August 31.
The workers also asked for a written pledge that all future payments would be secured.
“In case the above commitment is not confirmed we will be left with no other option but to suspend any work on the sites and offices.”
Papathomas responded on May 31 saying he would do his best to ensure one month’s pay by June 15, imploring the workers to be patient and reminding them that in its 60-year history, the company had never failed to meet its obligations.
He said the company was finalising the terms of a “mobilisation loan in a substantial amount” and once received, it would have funds not only to pay salaries but also to actively operate on the sites and raising income to pay salaries in the future.
“The lack of liquidity experience in recent months is the result of unpaid overdue amounts from the company’s clients, the collection of which we are pursuing on an urgent basis,” Papathomas said.
Papathomas said the company “fully accepts liability for all salaries and obligations that are due to its employees” and he appealed to their loyalty asking for a further 15 days to give the company time to sort out funds and draft a payment plan close to the one demanded by the workers.
“In the meantime, I have requested that the JPO BoD [board of directors] takes immediate steps to pay you one further month salary within the next 15 days. In this respect, please rest assured that I am personally making strenuous efforts to expedite the BoD’s decision on this matter.”
Before Papathomas’ letter, Tasos Constantinou, the group’s chief operations officer and general manager for Saudi Arabia, convened a meeting of managers and senior personnel and asked them to postpone the strike because the company would close. He too asked for 15 days to secure the guarantees the staff wanted.
In the meantime, an email from Papathomas to Constantinou was leaked blaming the Joannou family for the delays. Papathomas had also paid for an advertisement in Cyprus newspapers, blaming the Joannou family for company’s inability to meet its financial obligations in Saudi Arabia, a claim rejected in a subsequent ad by J&P.
June 15 has come and gone without any developments. Saudi Arabia is observing the Ramadan Eid holiday and there will be no work until Wednesday. Constantinou will not be back in the country before June 25.
The company’s problems became public in March when an earlier letter from the workers to Papathomas was leaked detailing their hardship because of being unpaid for months.
In April, J&P Overseas said it had made €120m from the sale of an airport in Jordan, boosting its cashflow and enabling the company to pay staff in Saudi Arabia but it appears that cashflow problems persist. Some €45m from the revenue went to the banks, while the Joannou family had demanded that Papathomas submitted a detailed plan on how the money would be used.
It was also reported recently that siblings Efthivoulos and Leoni Paraskevaidi had forced their mother Thelma off the board of J&P Ltd, the first company set up in Cyprus in 1941, because they consider her support for Papathomas the main cause of the problems.
The Paraskevaides family has been split into two camps, Efthivoulos and Leoni on one, and Thelma and her other daughter, Christina, and son-in-law Papathomas on the other. Leonie and Efthyvoulos are currently in court in Cyprus trying to have Papathomas removed from his position, a move the Joannou family also supports.