The Hindu Business Line : Over 50 tea exporters figure in Volcker report

OF the 130 Indian companies named in the Volcker Committee report on Iraq's Oil-for-Food Programme, more than 50 have dealt with tea exports and it includes two public sector companies.

Despite such massive involvement by the domestic tea companies, Indian Tea Association (ITA), the apex organisation of the tea industry, has consciously kept itself out of the whole controversy.

A senior ITA member said though 51 companies had been named in the Volcker report, none was a member of the association.

These are all merchant exporters and ITA's membership is restricted only to planters.

As a further clarification, he said Tata Tea Ltd was an ITA member. Volcker report does not mention its name but it does about Tata International Ltd, which is the foreign trading firm of the Tata Group.

Tata International, which has been pulled up for its export of automobiles, auto spare parts and tea, is not a member of ITA. Harrisons Malayalam, a RPG Group company and a planter, has also been named but it is based in South India.

The two central public sector companies named are Balmer Lawrie & Co Ltd and State Trading Corporation of India Ltd.

An ITA officer explained the association's role in the promotion of foreign trade. "We help the Union Government in preparing the policy documents after studying several macro trends in the global markets. We do not help individual companies in striking foreign deals. So, ITA cannot be pulled up in any way," sources said.

Several industry sources said there was nothing wrong in the role played by corporate houses. According to them, 10 per cent of the total value of the consignment was paid as `inland transportation charges' and/or `after sales service fees'.

These fees were directly paid to Iraqi Governmental organisations in dollars. The money was deposited in Lebanon, Jordan and Syria banks.

The Volcker report has questioned this 10 per cent fees. The tea industry has a clarification. "The consignments only reached the ports. Subsequently it had to be transported to the doorsteps of the distributor. We paid the fees for that purpose only," sources said.

Till now all the tea companies, barring Tata International, has kept silent on this matter. Business Line contacted several of these merchant exporters but none was willing to go on record.

However, the decision of the tax authorities to re-check the accounts of these companies might cause a furore. The taxmen have decided that they will not consider these `fees' as the company's expenses.

Reacting to it, tea exporters asked: "Can any deal anywhere be struck without entertaining such obligations leave alone a foreign deal?"

Exports to Iraq under the Oil-for-Food programme changed the total tea exports scenario for India during 2001 and 2002. From 17 million kg in 2001, tea exports to Iraq jumped to 44 million kg in 2002. In 2003, it again dropped to 14 million kg.

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