The Hindu Business Line : Tata Tea divests control in tea estates in Kerala

TATA Tea today divested management and control over 55,529 acres of tea estates in Kerala and transferred 12,770 workers to the newly formed company, Kannan Devan Hills Plantations Company Ltd.

Mr T.V. Alexander, Managing Director of the new company, told Business Line: "We have absolute confidence in the new initiative and weather permitting, we should be able to make a profit from the first year onwards."

The new company, which was registered with the Registrar of Companies last Wednesday and became operational today, could possibly be the largest participatory management company in the world, sources in the new company said.

Mr Joy Joseph, a lawyer who has been associated with the company during the last four decades, right from the days of James Finlay, is the Chairman of the new company.

Mr T.V. Alexander, who was the erstwhile General Manager, took over as the Managing Director of the company today.

The company will be run on participatory management lines, but productivity linked performance would be rewarded, sources in the company said.

There was a sense of hope and some apprehension among the workers. Mr M.Y. Ouseph, leader of the AITUC, said, "The cost of production of tea leaves is poised to come down by Rs 10-12 since we are cutting out overhead cost of maintaining the Kolkata and Kochi office.

"This should enhance our margins and make the company more competitive in the Indian markets."

"Almost 70 per cent of the shares of the new company will be held by the employees and a minority holding by the Tata Tea and the rest by a Trust," Mr Alexander said.

Every worker will be entitled to 300 shares for which the company will be providing a loan. This loan can be repaid in easy instalments. This will give the company a truly participatory nature, sources in the company said.

There will be a representative from the workers and another from the staff on the Board. Mr L. Krishnakumar, Senior Vice-President Finance, and Mr S. Swaminathan, Vice-President Marketing, would be representing Tata Tea on the board.

Mr Srikrishnan will be representing the shareholders. There will also be couple of independent Directors on the Board.

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