The source said IL&FS has assured to clear the pending dues of local workers in the next one or two days.
The Ethiopian police have taken into custody three Indian officials of crisis-hit IL&FS over non-payment of taxes and workers' salaries even as five Indian employees continue to be in captivity of the unpaid staff in the African nation, a source said.
The source said IL&FS had 15 Indian employees in Ethiopia, seven of whom were held captive by the local staff. Of the seven, two were released last week on medical ground.
The three employees, out of the eight employees who were not held captive, were taken into custody, he said.
"The three employees are in police custody in Wolliso (in central Ethiopia)," the source said.
It wasn't immediately known on what charges the three employees have been arrested.
The company did not immediately respond to email sent for comments on the issue.
IL&FS arm ITNL through its wholly owned subsidiary, Elsamex SA, has been executing road projects across three sites in Ethiopia. IL&FS has defaulted on paying both taxes and local employee pensions for nine months.
The workers in Ethiopia have allegedly not been given salaries for the month of October and November by the ITNL's subsidiary.
The source said IL&FS has assured to clear the pending dues of local workers in the next one or two days.
On November 25, local Ethiopian workers of IL&FS Transportation Network (ITNL), a wholly-owned subsidiary of cash-strapped IL&FS, took hostage seven Indian employees of the company for not having received salaries since the past two months.
The five employees who continues to remain in captivity are Sukhvinder Singh, Bishnu Nagaraju, Chaitanya Hari, Khurram Imam and Neeraj Raghuwanshi.
While Mr Singh, Mr Nagaraju, Mr Hari and Mr Imam are under house arrest at one of the locations of Nekemte-Bure road project of Elsamex SA in Ethiopia, Mr Raghuwanshi is been held hostage at a different location at the same project site.
The two ITNL's employees - Harish Bandi and Bhaskar Reddy, who were freed last week, are on their way back to India, the source said. Both of them were held hostage at ITNL's Ambo-Wolliso Road Upgrading Project site in central Ethiopia.
ITNL's subsidiary has employed close to 800 Ethiopian workers for its three construction sites.
Indian employees of ITNL in Ethiopia too have not received salaries from July 2018, according to the source.
In a statement on Saturday, IL&FS had said it has been making all-round efforts, in coordination with the Ministry of External Affairs (MEA), Indian government and the Indian Embassy in Addis Ababa, to ensure the safe and early return of its employees.
ITNL had sought approval on November 16, 2018, through its authorised dealer bank, to remit funds overseas but approvals are awaited, the statement had said.
IL&FS Group and its various subsidiaries, including ITNL, are facing a liquidity crisis and have defaulted on various debt payments.
As of October 8, 2018, the total debt of the group stood at Rs 94,215.6 crore.
After the IL&FS crisis had a cascading effect on the market, the government on October 1 superseded its board and appointed a seven-member board headed by Uday Kotak as the chairman. The new board is working on a resolution plan for the debt-ridden company.