The Tata Tea / ULFA Story

            

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Themes: Ethics in Business
Period : 1997-2001
Organization : Tata Tea, ULFA
Pub Date : 2002
Countries : India
Industry : Food & Beverages

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Case Code : BECG008
Case Length : 09 Pages
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The Tata Tea / ULFA Story | Case Study



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The Assam Tea Industry Terror Story Contd...

There was an atmoshpere of terror in the tea gardens, as is evident from the statement of the wife of a tea planter who said, "You begin to get really afraid if your husband doesn't return home by 5.30 in the evening." Though the companies officially denied it, it was common knowledge that they were paying the militants. Meanwhile, the murders resumed in 1994. By the end of 2000, over 15 tea management personnel were killed. All along, Tata Tea was reportedly the only company, which refused to pay the militants despite its own employees having been killed and kidnapped. ULFA's commander-in-chief Paresh Barua (Barua) also confirmed that Tata Tea had never paid money to the outfit. The reasons as to why Tata Tea had been able to avoid making payments to the militants were rooted deep in a complex maze of events involving the Assam state government, the central government, the Intelligence Bureau (IB), the Assam police and Tata Tea itself.

Tata Tea's Deals with the Ulfa and the Government

The ULFA militants contacted Tata Tea for the first time in 1990. Unwilling to give cash to the militants, Tata Tea offered to invest in the 'upliftment of the Assamese people' instead. Over the next few years, the company set up 65 hospitals, 280 adult literacy centres, 173 childcare centres, a technical training institute and 110 schools.

Tata Tea also instituted scholarships and started a welfare program for handicapped children. The company also took the Lifeline Express into Assam in 1995 which rendered critically needed medical assistance to people from the weaker sections of society.

Tata Tea regularly carried out its 'Outreach Medical Program,' under which fully equipped ambulances with doctors went to remote rural areas.

Sensing that the company was serious about its commitment to the development of the Assamese people, the ULFA left Tata Tea alone. However, the situation changed in August 1993, when Bolin Bordoloi (Bolin), senior manager of Tata Tea's Guwahati office in Assam, was kidnapped by Bodo militants. Tata Tea refused to pay ransom and began negotiations with the militants for his release. Bolin was eventually released in July 1994, reportedly after the payment of a Rs 1 crore ransom -denied by Tata Tea and Bolin's family members.

The ULFA then contended that since the company was paying other militant outfits, they might as well ask for money too. In December 1995, Barua wrote a letter to Tata Tea demanding 100 pairs of walkie-talkies. The company's officials met the home secretary of Assam and requested him to take action against the extortion threats. However, no action was taken in this regard. In January 1996, Tata Tea wrote to ULFA expressing its inability to supply such equipment, but also indicated its willingness to discuss legitimate development projects.

The company sent copies of this letter to the home secretary, but still no action was taken. Meanwhile, Managing Director K Krishna Kumar (Krishna Kumar) began receiving threatening calls asking him to stop sending such letters to the home secretary. At this point, Tata Tea decided to seek the help of the IB based in Delhi. The company was asked to deal with an additional director in IB, Rattan Sehgal (Sehgal).

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