Tata Tea roadmap to exit plantations hits roadblock
The Financial Express — February 28, 2005

Tata Tea's plans to exit from its tea plantations spread over 24,137 hectares in the Munnar hills in Kerala have hit a roadblock, following a court injunction. The munsiff court in Devikulam on a petition by are presentative of the Poonjar Kovilakam that leased out the land has ordered an injunction on the transfer. According to the order of February 25, the court has restrained Tata Tea Ltd from transferring or selling or creating third party interest on the entire land granted to it under lease and licence. Tata Tea executive director V Venkiteswaran told FE that there was an injunction.

However, the matter had earlier been raised in the Kerala high court that had not taken any decision in the matter. Also, it was only a section of the relatives of the Kovilakam family that raised the issue, he added. The company's response, to transfer 15 estates to a new limited company where the Tatas would have a stake less than 20% had received good response from the staff and trade unions, he said. It was going ahead with getting the shareholders' nod for the exit, he added.

The company had over 24,000 workers in its South plantations. As per the plans of the Tatas, shifting of ownership to the workers would help drop the production cost by over Rs 8 per kg. ICIC1 Securities would be extending debt to the new company. A spokesman of the Kovilakam told FE that the land in Kannan Devan Hills, Mankulam and Anavatty villages were private properties of the family, popularly known as Poonjar Kovilakam.