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Business Commentary/Dilip Thakore

Tata Tea managers did little wrong

The October 24 ruling of the Supreme Court prohibiting courts other than the Guwahati high court from adjudicating all cases of the alleged funding of terrorists and militants in Assam by tea companies has set the stage for an absorbing courtroom battle of far-reaching import. The hearings are going on at the time of writing.

The issues, as is likely to be framed in the first case to be tried by the special bench, will be whether the management of Tata Tea, the world's largest integrated tea company (total area under crop 55,000 acres; annual tea production 60 million kilograms), aided and abetted the separatist movement in Assam spearheaded by the outlawed United Liberation Front of Assam by providing material help to it in cash or in kind.

The Assam state government has filed criminal charges against four managers (including Managing Director R K Krishna Kumar) of Tata Tea for paying for the medical treatment in Bombay and providing other material help to known officials of ULFA. (The Guwahati high court dismissed the anticipatory bail plea of of the three of them).

The specific charges against Tata Tea seem mild in comparison with the regular 'tax' reportedly paid by other tea company managements in Assam to ULFA. Unlike many of these companies whose managements paid cash to ULFA and Bodo militants to buy peace, Tata Tea managers steadfastly assert that the company has never paid cash nor supplied equipment capable of military usage. However when complaints of extortion fell upon deaf ears in the state government, the company began negotiations to promote 'developments projects' to help residents of Assam at the behest of ULFA. Among the demands conceded were the building of hospitals and job reservations for locals.

A bizarre twist in this tale is that Tata Tea officials maintain that this negotiating strategy was adopted at the instance of Rattan Seghal, former additional director of the Delhi-based Intelligence Bureau which was kept fully informed by the company. Seghal was accused of being too cooperative with the American CIA and compulsorily retired from the IB.

The facts of this particular case apart, the forthcoming trial of the Tata Tea managers for sedition and conspiracy to overthrow the states government raises the larger issue of what managers in industry should do when money is demanded with menaces and threats by extortionists or others who claim to be fighting for larger causes. In a civic and business environment in which the law and order maintenance machinery is in an obvious state of disrepair or worse, should corporate managers and businessmen give priority to the welfare of their public (shareholders, suppliers, employees and consumers) or to the letter and spirit of the law which may well result in death or injury to them and perhaps even to the closure of their businesses? It's a tricky conundrum to which there aren't any easy answers.

On the one hand, there is a strong argument that a business enterprise is a live juristic personality whose longevity and life managers of the enterprise are duty-bound to further and protect. Business enterprises are important members of a community and they contribute to its wealth and welfare by producing goods and services, providing employment and paying taxes. Therefore the primary duty of its directors and managers is to ensure that it discharges the objectives -- within the boundaries drawn by the law -- contained in its memorandum of association.

Consequently, when the life and well-being of an enterprise is threatened, it is incumbent upon its managers to negotiate is threatened it is incumbent upon its managers to negotiate ways and means within the ambit of the law, and failing that, beyond the confines of legal structures, to protect the its vital interests. As usual, Prime Minister Gujral's rhetorical question about the relative importance of 'commerce or the nation' is too simplistic.

In this particular case there is hardly any doubt that the conduct of Tata Tea managers has been exemplary. With the Assam state government's writ barely extending beyond Guwahati and its compromised police and paramilitary forces unable to provide even minimal protection to the far-flung properties and personnel of tea companies, they had no option but to parley with militant organisations. The revelation that Tata Tea managers had kept the IB informed about the negotiations provides further proof of their bona fides.

In the circumstances, the determination of the state government to prosecute managers of the company for consorting with the enemy is sheer hypocrisy. Particularly since the incumbent Asom Gana Parishad government in Assam played the subnationalism card to the hilt to win its mandate.

After letting the law and order situation slide to the extent it has, the only options open to the central and state governments are to strengthen the law and order machinery in Assam so that the police and paramilitary forces are able to provide effective protection to tea estate managers and to help the Indian Army to break the back of ULFA and other militant organisations.

In particular, there is a good argument in favour of the Central Bureau of Investigation raising its own force of plainclothes professional gunmen to investigate, infiltrate and destroy militant organisations and extortion gangs. Way back in the 1930, when US business was severely threatened by the mafia and liquor crime syndicates, the Federal Bureau of Investigation raised its own force of G-men which took on and bested organised crime.

True this is a desperate remedy. But these are desperate times.

The Tata Tea controversy reports

Dilip Thakore