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Tea Board on Friday invited expression of interest (EoI) from interested parties for taking over management control of Demdima tea estate in West Bengal for five to 11 year period. The EoI is silent on ownership issues.
The garden is owned by Shantipara Tea Company, an associate of G P Goenka controlled Duncan Industries Ltd that is recently in news for lining up nearly a dozen of sick gardens which defaulted paying almost every statutory due.
There are also reports of starvation deaths from these gardens.
According to the EoI, the estate defaulted on statutory payment of provident fund and gratuity, didn’t provide for due medical facilities to workers and has “high levels of dues” towards wages, and other fringe benefits.
However, the future management will not be liable for payment of past dues including payment to creditors.
“The authorised person (to be selected through bidding) shall not be liable to honour the contract/agreement entered by the previous owner,” the notice says. However, the new management “shall not pay” less wage/perquisite/benefit” than the workers were enjoying in the past.
Legal hurdle
The EoI was sought on the back of January 28 order by Tea Board of India for takeover of management in seven Goenka gardens under Tea Act of 1953.
The process has already hit several legal hurdles.
Six out of seven gardens are controlled by the sick Duncan Industries, Tea Board needs concurrence of the Board for Industrial and Financial Reconstruction (BIFR) to implement the order in these estates.
Demdima is free asset. But, the management of Shantipara as well as Duncan have challenged the takeover order in Calcutta High Court.
The Board also admits the roadblocks ahead. “Selection of authorised person will be subjected to final decision of the Calcutta High Court,” The notice for EoI declared.
Industry doubtful
Prominent tea companies in the region running their estates successfully are doubtful in the Tea Board EoI will attract series participation.
“Considering the long gestation in plantation, five to 11 years is inadequate for long term planning and investment. Moreover a temporary management may not have reasons enough to invest for the future of an asset that is owned by someone else,” a planter said on condition of anonymity.
He, however, feels timely measures to prevent piling up of statutory dues would have ensured a better result. “It is surprising why the State and Central authorities kept watching while the company was defaulting payment of dues,” he said.
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