Kochi: ‘BlueLabs wind up, about 100 techies loose jobs’ would have been the ideal caption for this article but with allegations and counter allegations, we decided to take the safer option. About 100 employees of the Infopark based BlueLabs Technology Solutions, who lost their jobs recently, have come out in the open with their allegations about the CEO’s mismanagement of the company which eventually led to the firm’s closure.
Founded in 2007 by Mathews Jose, an entrepreneur, BlueLabs Technology Solutions is an IT Services and Technology Consulting firm with operations in Infopark Kochi (Leela Infopark) and Infopark Koratty near Thrissur. In fact BlueLabs was the first company to move into Infopark Koratty in November 2010 and the company had, at its peak, about 130 IT professionals on its rolls.
It was on September 22, 2010 that some comments about the CEO were first posted on a previous article about BlueLabs on Kerala IT News. Several more comments and criticisms were posted on the next day and we got in touch with the CEO for a clarification. Quoting from a mail to Kerala IT News, Mathews said, “We lost two of our major clients and client payments worth crores got stuck. It affected the working capital of the company and we decided to close the operations of the company”. As most of the comments were not in good taste, we decided to remove them and posted an update to the news item on September 24, 2010.
As we continued to get more calls, comments and mails, we also contacted the Infopark CEO and found that BlueLabs had not paid the rent to Infopark for the last six months and Infopark had issued them notice to vacate. BlueLabs went to Court for a stay and in spite of a Court order to pay up by September 19, 2010, the company had failed to do so. We also came to know that PF contributions and TDS have not been deposited in the Government Treasury even though it has been deducted from the employees.
According to some of the ex-employees, it was in this context that the CEO decided to wind up the operations of the company to avoid paying up the employees, some of them who haven’t been paid their salary for months together. Meanwhile, Mathews is said to have started another a new company with about 12 former employees of BlueLabs and 30 new recruits. (In his mail, he had mentioned to us that he will be back in business soon) The ex-employees also allege the CEO’s flamboyant and extravagant lifestyle along with bad management skills as the reasons why the company has wound up.
Kerala IT News is now publishing most of the comments as we feel our readers have a right to know how a good IT company wound up. Also please do check our earlier story Paragon fellowship to BlueLabs CEO.
Anil Philip
Kerala IT News
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I noticed your message regarding Bluelabs at http://keralaitnews.com/it-parks/infopark/646-paragon-fellowship. While I have not seen the comments you referred to in your note, I can imagine what it would have been. Thank you for taking the initiative to contact the CEO, Mathews Jose, to see what their side of the story was. I would like to make a quick comment on the situation as well.
I was an employee of BlueLabs and was heading the php department of the company, overseeing around 25 programmers directly reporting to me; so I have a good idea of the situation and an inside view of it. While what Mathews mentioned in his email to you about losing a client and payments getting stuck was correct, it is not the whole story. The entire story would be a very long one and I will not bore you with it. I will briefly outline it though so that you know what the situation was, and why the employees are all disgruntled.
The truth of the matter is that it was not the loss of a single client that caused the issue. There were always salary delays and payment delays in BlueLabs as Mathews never managed the incoming funds well. The aim was never to create a contingency fund but rather to spend any incoming money as soon as possible. He frequently visited (sometimes twice a month ) foreign countries at the pretext of meeting clients and the accounts show that these trips took off a good deal of money, usually close to 4 - 5 lakhs as he travelled only in business class and stayed in 5 star hotels. Similarly, very shady foreign currency transactions were being handled and this money was siphoned off elsewhere. The staff were not paid salaries since February and were fed stories of investors coming in. That never happened and as a result people left the company.
All this is understandable and as you said it happens in business. The issue currently though is the below:
1. The company has without fail deducted TDS from employees but have not paid to the income tax dept yet. If the issue was due to a client loss like Mathews mentioned, why is TDS pending for the entire financial year of 2009-2010. Employees have not been able to file their returns and possibly will get notices for settlement.
2. Provident Fund has been deducted similarly from the employees but this has not been paid to the PF department yet. When a few employees checked this with the PF office, they mentioned that PF accounts have been created for just 10-15 staff alone( as opposed to around 100 people who were working for BlueLabs at one point) and only small payments were ever made. They said that the next steps will be the arrest and prosecution of the directors.
3. Mathews Jose has not dissolved the company as he claimed. Infopark sealed the Koratty office since rent was not paid for over six months. Infopark apparently sent a notice in June asking for settlement but Mathews got a stay from the honorable court and a settlement period of 2 months was granted. At the end of August, when this period was up, he still had not paid Infopark and they sealed the office. Hence, he had to leave Koratty. This is what he meant by "closing operations"
4. Mathews owes a lot of money (running to crores) to vendors and Federal Bank. Some vendors who are small time players are on the verge of closure as they had provided service for months by borrowing money believing Mathews' promise of paying everything back. Mathews doesn't now pick up their phones or plan to settle their money. The same is the case with some major foreign exchange companies that he has dealt with.
5. He has started a new company ( which is not registered legally when checked a week back) and have made offers of employment from that company to the remaining staff of BlueLabs who had not resigned. The site is still under construction and can be viewed at http://www.wodux.com/. So, at this stage, rather than trying to settle his debt and come to an amicable solution, he has started a new shady company and is fast trying to forget his obligations.
6. He made an agreement with a client of his under which the client would pay Mathews money an advance which would be used to pay the staff working for that client's projects. This agreement was signed by Mathews but this money never found its way to all the staff mentioned in that agreement. The agreement had a clause wherein which a condition for making this payment would be that Mathews would agree to those staff being hired directly by the client. Once the client became aware of the payment not being made to the staff, he made employment offers to these staff via his Indian company. Many staff accepted this offer and a smear campaign has been launched against them by Mathews.
All of these issues have contributed to staff feeling cheated. While the staff have no hope that any settlement will come from Mathews' side, what is important to them is that the TDS and PF dues are settled. Equally important is that he is not allowed to do this again, where money is siphoned off and more young people cheated of their hard earned money and security. I am not sure if you have any connections with Mathews on a personal level; even if you do I am sure you would agree that the bigger picture is more important and truer than any relationships.
Since you are a respected voice in the Kerala IT field, I would like to respectfully urge you to check this out and ensure that such practices are not allowed. You need not rely on my version of the story, checking with solid institutions like Infopark, Federal Bank, etc will give you the full picture. I am sorry if this mail has been long, but I felt it was important for you to know what the actual situation is. Like I said, there are many more shocking incidents but that is better left unsaid.
An ex Employee
I am an ex-employee of BlueLabs Technology Solutions which was run by Mathews Jose. I was serving as Project Manager. During the period of nearly 2 years, I never got my salary on time with an exception during the initial 2 months. Salary was delayed for 2 weeks initially, then it became 3 weeks and it started crossing 1 month. But I never pestered Mathews for salary matters and pending onsite allowances by thinking things will be all right in the near future.
This was the case months before when Bluelabs lost a prestigious project. When the company lost this project in February 2010, my salary from December 2009 was already pending. This was not the case with just me. Salary of all the senior employees case was exactly same. When I resigned from Bluelabs in August 2010, company had a liability of Rs 3.26 lakhs (including 4 months salary from April to July and Onsite Allowances ageing back from March 2009).
Also, the TDS Amount deducted from my salary for the financial year 2009-2010 comes around Rs 90,000/- which is not yet deposited to the Income Tax Department. Form 16 was not issued to any of the employees due to this reason. So, the key point is, even before company lost prestigious project in Febrary 2010, the TDS amount was not paid to Government on time. PF Amount deducted from salary is also the same. We've already filed a mass petition at PF Commissioner's Office in Kaloor, Kochi.
A question will arise why we waited for so long ?? Why didn't you look for other options to avoid the worst ??
This is the key area. After losing a prestigious project in February 2010, we were really concerned and this was shared with Mr. Mathews. He called up a meeting with all the employees in last week of February. He promised that salary till January will be paid in March 28 and February salary will be settled in April 10. To our disappointment, the promised dates were never met and outstanding salary started growing.
All other projects were still running profitably. Employees were co-operative and the financial issues didn't affect the work. Again, being concerned, Sr employees including me talked with CEO to know his plans to recover from this crisis. He told a take over deal is under discussion. Beleiving on the take over plan and other positive project renenues he showed us, we started thinking positive.He promised several dates to the employees for the take over to be over. When we reach these dates, he will come up with another story to justify the delay.
We were much supportive to Mr. Mathews Jose and showed patience till June 5 for the take over to happen. But, take over did not happen. Then he started convincing us that he is in talk with 6 foreign companies for external investment through a middle man agency and a deal will be finalized by choosing the best from these six. He promised a date June 30 for a deal to be fixed.
Again, this also did not work out. He called up a meeting in July with senior employees repeating the old things and trying to convince us about a new deal from a Canadian company which has offices in Pune. But, we we had already lost hopes and openly told the same to him. In the meanwhile, he started calling certain employees including me individually in a confidential manner saying he is going to start a new company with a small team by selectively picking a few employees. I did not agree to this as it looked unethical. By this time I had already lost trust in him.
Here's my honest understanding about Mr. Mathews Jose
As a part of branding himself, he had put his profiles in some websites like Paragon100asia.
I personally feel that any award which is awarded to him will be a great dishonour to the award itself.
I am writing this for the benefit of other emplyees and to share my experiences with others so that similar incidents should not happen again.
Another ex-employee
He owes me 1.3 lakhs (3 and a half months salary)
He didn't deposit my PF and TDS deducted from my salary to Govt Treasury.
I am an ex-employee of BlueLabs. I am writing this comment after reading what the editor has quoted. I worked as a manager in the company and was keeping mum to help my colleagues get a job somewhere, since the company closed down. Now, I am moved to a situation that I have to respond to the baseless 'loosing the clients' excuse mentioned by the CEO. The company was not paying salaries on time for the past one year; the loss of the client is just to cover the issue.
If you delve deep into why the company lost the client, there also you may find other scams. The company had enough clients to sustain its growth and pay the dues on time. But due to the mismanagement and rather indulging lifestyle of the Directors, the company accounts was a mess all the time. The management has not only cheated us employees, but also the vendors including Transportation service providers, Infopark, Travel agents, International Exhibition Management Agencies, clients from all over the world and Federal Bank.
If you think about the amount of damage made to the Outsourcing industry, the impact is alarming. Most of the clients would think twice before outsourcing work to India again. The CEO has already started another company, my concern is what impact that company is gonna make. I sincerely, appeal to all reading this comment to check the history of the management team before joining any new start-ups.
The TDS cut from my salary for 2009-2010 was not paid to IT department. I lost an opportunity to buy a house due to non-availability of Form No 16. When I asked for my Provident fund they give a PF number, which I later found as fake. I still have to get my salary for 4 months and even when I needed some money urgently they refused to pick up my call and didn’t answer my messages.
He also runs a training center for which around 20 MCA and BTech students have paid large amounts of money as enrollment fees. I have no idea what has happened to those students since the facility in Koratty was closed down by Infopark due to non payment of rent. My deep sympathies are with the parents of those students.
I am one of the people who have joined this "new" company that all are talking about. I would like to point out that most of us are not here because of any loyalty to BlueLabs or Mathews. We are here because there is no other way out. In my situation I am not able to check for a job outside Kochi due to family interests and it is very difficult finding a job in Kochi with the Bluelabs name being so bad now. Wherever i have gone for an interview, they smile like they know everything and i dont hear from them afterwords. So, my only option is to stay here and hope things work out. And wait for a job offer. This is also the case with many of others here with me. It is not because we trust Mathews. We dont.
To my friends from Bluelabs - Please don't see us as traitors. We have no other option.We are also owed pending salaries like youand our PF and TDS is in the same situation. We are also very angry but can not do anything now.
The situation is not very different here and payment is delayed like before. But we hope it will improve soon.
To whom so ever it may concern, at the new company...
No need to think yourself as traitors, no one considers you like that either. Each individual has got their own personal goals, right jobs or what ever it may be.
At least you have been bold enough to say 'I would like to point out that most of us are not here because of any loyalty to BlueLabs or Mathews'.
Thank you for taking time to publish the comments.
Am an employee who joined "Team Blue" in the final days (first quarter of 2010) of the company. Some of my ex-colleagues were already in the organization and I was aware that though there were salary delays of around 20 days the company was a good place to work. (My friends who are reading this.. Please note: "This is NOT a comment where am blaming you guys". You guys are my friends and will remain so.)
I still remember the first time I met the CEO. He was so serious looking and he was young!!. I never knew that such a young guy was the CEO. I was in Awe.. The awe turned into OMG in the second month..
They lost the account while I was serving my notice period in the previous company. The CEO was trying to manage the entire operations with the invoice generated from the "lost" project. What happened to the invoice generated from the other projects? As far as I am aware. Only god and the ex-CEO know the answer to that...
He never had a contingency plan in hand.. Can you believe that? For a person who has worked in the management level in around 2-3 organizations, can he be more dumb?
I can bet that if the CEO were not in the Information Technology business, he would have given Shabarinath (the MD of the firm Total4U) a run for his money. Only thing the firm would have to be named "Total4Me".
A lot of malayalam proverbs come to mind when we speak of the CEO, but since I am having difficulty in translating them, I'll end this comment saying ... He's all fart and no S**t!!
@ Mr ravan .. FYI.. We are not asking the CEO for increments or appraisals. We are asking for our pending salaries.. And if Kerala employees are sooo bad as you say, why do organizations from other states hire them? You Mr Ravan.. are only adding insult to injury...
@Ravan : How can u say that "Kerala employees are naturally dishonest and it is a major miracle that any company can even survive in Kerala" ?
Hello Mr.Ravan, u r wrong.Then why u started ur new company in kerala itself and recruited malayalees ? In meanwhile ,World's top most IT companies r trying make their presence in Kerala .More than 100000 employees working in Kerala IT. How giants like TCS, Cognizant, ACS , Allianz etc came to kerala. Its a miracle to Bluelabs couldn't survive in Kerala even the company had talented and highly skilled professionals at that time. MISMANAGEMENT by the RAVAN, thats the only thing happened to Bluelabs.
Though the name is mythological, its quite evident who has put up this post.
For you information Mr. Ravan, there are about 50+ IT companies, operating in Kochi Infopark alone, and umpteen others in Trivandrum technopark, and other locations in Kerala. And the vast majority of employees here are Keralites. The sincere and hardworking nature of employees of Kerala, is one of the reasons why a large number of major IT companies have been starting their operations in Kerala for the past few years. And there are lot of other companies with Karalite owners and Keralite employees too and which have been running smoothly for more than a decade.
I believe the person who has posted this is also a Keralite, and would have been an employee at some point of time, and he seems to list out all the activities he was used to in his office. And if you are an employer you have mentioned how you intend to treat your employees, as dogs. This is enough hint for the real identity of Mr.Ravan.
There is no communist principle involved here, we are asking for pending salaries, that is our hard earned money, and not a share of the company profit.
All the readers should kindly note that the allegations against the CEO are not baseless, each of them is backed up with solid proofs, which can be produced in front of any authority, when the need comes.
A company is forced to shut down its operation due to loss of client or mismanagement. From the above article I can understand that Bluelabs has lost a client and was forced to shutdown its operation.
My question is
1. Do a company survive with one client or one project?
2. Do the company pay out the whole amount from the client to the employees and operation?
3. Why the management fail to pay the Tax and PF which has been deducted from the employees?
I can't justify with the comments you have put. People blame on CEO when the above said activities are happening. Hope you are aware of the Satyam scam.
"Do a company survive with one client or one project? "
Based on the number of employees it can vary. True a company with 130 employees cannot run with a single client. Bluelabs was still running in profit even after the lost of the client. It just affected the profit of Mr. M J. He really cheated the employees. He is in a belief that if the company is shut down , they he can shut down the chapter of obligation. Else WHY HE STARTED A COMPANY WITH ANOTHER NAME, WHY HE DIDNT STICK WITH THE NAME BLUELABS
2. Do the company pay out the whole amount from the client to the employees and operation?
If the company is in the starting stage , the client amount wont be enough to meet the expenses fully. They need some capital amount. But situation is different with bluelabs. Bluelabs was in a good position. Mr M J have some good qualities in him. He is capable of capturing good client orders . But he is a big ZERO in managing. But he acts as if he is a Mr. Perfect.
Why the management fail to pay the Tax and PF which has been deducted from the employees?
I also like to hear the answer to this question from the management .
Mr mathews a straight forward man could not oversee the cheating of Mr Mobin.The finelabs also may have problem in future and will they throw mud on Mr mobin
Let this be for a good reason and dont consider it a place for criticing the coworkers.
only thing we are doing is helping keralaITnews increase hits...
if u have complaints move legally.. this is not cucumber town...
Cowards doesn't have the guts to face the world in their real skin..
It happens Rarely... when it happens it happens for a reason. The benefit is in crores.. it erases the previous memories.. it always rewrites the benchmark it creates new history
Ranjith
The Question was who was good!! the initial phase suggested the balloon man was good,.... but soon it was proved that it was just a hype. after cheating the supporters the balloon man went out of the scene the intelligent business man proved he is the best. even after the big gun came out the businessman was still there... but... the balloon man vanished out of sight
Ranjith
This proves that cheaters will never prevail !!
I don't want this thread to turn into a verbal joust, I want my friends who still support the guy to have a second... or rather third thought...
I joined BlueLabs in April 2009 and I was informed by the CEO that “we are really growing’’. I believed it but some `symptoms’ like salary getting delayed, salary distributed in parts, etc. made me skeptical, but I rather loved to believe the CEO’s words.
From July 09 onwards, I repeatedly asked for my PF number through mails or directly to Director HR, but all were in vain. I finally got it when I resigned in August 2010. And surely it was not very amusing to know later from the PF authorities that they have NOT EVEN OPENED an account for me.
My questions are
1. PF amount was deducted from my April salary onwards. Where has the entire amount gone? Was it any client’s or ex-COO’s mistake? Delaying the payment of a few months PF amount is understandable (though not agreeable), but not even opening the account, (and giving a false account number) amounts to cheating.
2. Why didn’t the `young entrepreneur’ pay TDS for months? Is it because he lost some clients?
3. I was not paid salary for the last three and a half months. Who was responsible for not paying the salary? Was it the ex-COO’s advice?
4. Why didn’t they pay rent to Infopark for months even before losing the so-called client?
5. And finally, how long were we expected to serve Mathews at BlueLabs, without salary?
And Mr. Ravan, (thanks to the very imaginative, undoubtedly idiotic person who coined the name; but this modern Ravan’s acts were not that heroic)
I never knew that asking for the pending salary was such a crime. And if it amounts to dishonesty, I am glad to be dishonest, though I am not good at cooking up stories of investments from foreign companies.
6 It is written that ``the only way you can get work out of a Kerala employee is if you stand right there in front of him, treat him like a dog’’. I would like to remind Mr. Ravan that by not paying the salary, Mathews Jose was actually treating us like dogs.
7 Why didn’t he pay Infopark the rent? Why didn’t he pay the employees? What about PF, TDS, various vendors….? Do they all belong to the `inferior genetics’ so that you can avoid paying them all?
I earnestly hope that the days to come will reveal that it is not a cucumber country, as mentioned by my dear friend, Ranjith.
Now Inorder to destroy the good will of bluelabs he joined the side of employees who has pending salaries and he makes the fire to burn .The employees thinks that they will get their salary due t these .Ex coo which was inefficient was with Mr mathews for all the business and he had all access to the busines details.He now wants the details to be handed over to the new company @ kaloor.
He propagandizes by creating fake facebook profiles .The business of the company was destroyed by putting hand with the MD of finelabs and they together has planned this to happen.
You have admitted that all of these are facts.
That itself implies that the ex-COO is not at fault.
Regarding the 'goodwill' of Bluelabs, a company which has not paid its employees, and in that case vendors, for months together does not have any goodwill at all to lose. The COO is not to be blamed for that.
The CEO himself has said that the company was at loss for having lost clients, and that was exactly the reason he gave for not paying salaries and other dues, saying 'such things happens in business'. So how can you say that the 'business was destroyed' as a result of 'planning' by the ex-COO and finelabs MD. According to the CEO, the destruction had happened much before.